Nairobi bourse sheds off 1.3 bln shares in 2015 as bear-run hits investors

The number of shares traded at the Nairobi Securities Exchange (NSE) in 2015 dropped by over 1.3 billion as compared to a similar period a year earlier, pointing to the difficult times investors encountered at the bourse.

Slightly over 6.81 billion shares were traded at the bourse in 2015, according to new data from the NSE received Tuesday, a drop from 8.13 billion shares in 2014.

The least number of shares during the period were traded in the first and last quarters, the data indicated, with January 2015 becoming the slowest month at the securities market, where a paltry 414 million shares were traded.

The busiest month was August, where 734 million shares were traded at the market, which until recently was one of the premier investment choice for many.

The drop in the number of shares traded capture the decline in fortunes at the NSE, with 2015 being one of the bad years for investors, a good number who, according to analysts, fled the market in search of higher returns from Egypt, Nigeria and South African stock markets.

As the number of shares dropped, the value of the shares traded too plummeted, going down by 220 million U.S. dollars, from 2.11 billion dollars.

Other key indices of the market declined significantly, plunging to a level last seen in 2012 as investors continued to count losses.

During the period, investors' wealth, measured by market capitalisation, dropped by about 6 billion dollars due to steep decline in the fall of prices of different stocks.

The key index dropped from 26 billion dollars at the beginning of January 2015, to 20 billion dollars in December.

The plunge in shareholders' wealth was steep in October, the month Kenya was facing high lending rates. Investors lost 1.3 billion dollars as the bourse took in a beating for the twentieth straight month.

Similarly, the NSE All Share index, which measures the performance of all listed shares, closed the year at 145 points, a two-year low while the NSE 20 share index at 3,900 points, a 30-month low.

Turnover in the secondary bonds market too dropped drastically, with bonds worth a paltry 6 million dollars being traded in some weeks.

Since 2016 began, the market has already shed 6 percent of its value as investors' losses continue. However, analysts are optimistic that the bear run would cease in the first quarter of this year.

"I believe the bear run is over if you look at 0.7 percent gain at the market in the last one week. Market capitalisation, number of shares traded and the NSE 20 share index all went up, though marginally," Ernest Manuyo, a business management lecturer in Nairobi, said. Endit