Foreign investors dominate trading at Nairobi bourse

Stockbrokers at the Nairobi Securities Exchange. FILE PHOTO | NMG

What you need to know:

  • Foreign traders have accounted for at least 65 per cent of weekly equity turnover since the beginning of June, touching a high of 74 per cent in the week ending June 29.
  • Most of their activity has been seen as, however, with net sales of Sh3.8 billion in the six weeks since the beginning of June — they have also had a net selling position in the last 16 consecutive trading sessions at the bourse.

Foreign investors have dominated stock market trading activity in recent weeks as local retail traders shy away due to falling share prices.

The Nairobi Securities Exchange (NSE) data compiled by Standard Investment Bank (SIB) shows that the foreign traders have accounted for at least 65 per cent of weekly equity turnover since the beginning of June, touching a high of 74 per cent in the week ending June 29.

Most of their activity has been seen as, however, with net sales of Sh3.8 billion in the six weeks since the beginning of June — they have also had a net selling position in the last 16 consecutive trading sessions at the bourse.

Analysts say their trades have been concentrated on the large cap counters which have traditionally offered ample liquidity to support their big volume trades.

“Index counters, mostly Safaricom, KCB, Equity and EABL remain the most traded counters for the foreign desk,” said Genghis Capital in a market brief.

The foreign investors are also taking advantage of a stronger shilling, which gives them an exchange gain when they are exiting their portfolios — by earning them more dollars per shilling when they do their conversion before leaving the market.

This year, the local currency has appreciated by 2.4 per cent to the dollar, exchanging at 100.80 units to the greenback.

This selling activity on the large cap counters has continued to have a negative effect on the benchmark NSE 20 share index, which has shed 14 per cent since the beginning of the second quarter of the year.

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