Investor wealth on the Nairobi Securities Exchange (NSE) rose by Sh237.2 billion in the nine months to September 2024, reversing the losses seen a year earlier as foreign investors cut down on their exits from the market.
NSE data shows that market capitalisation—the measure of investor wealth— rose to Sh1.775 trillion on September 30 from Sh1.501 trillion at the beginning of the year.
The benchmark NSE 20 Share Index was up 18.3 percent in the period, while the NSE All Share Index rose by 16.3 percent.
These indicators rose despite a dip in the NSE’s traded turnover in the period to Sh65.1 billion in the nine months, from Sh76.4 billion the previous year.
Foreign investors, who mainly trade in the large blue chip stocks that drive the market, cut their volume of net exits from the NSE to Sh18.6 million for the nine months from Sh18.95 billion in the corresponding period in 2023.
The NSE was able to retain foreign capital after the shilling appreciated by 21 percent versus the dollar in the period, reversing the exchange losses suffered by foreign investors the previous year when the currency was the worst performing in Africa.
In addition to these forex losses, difficulties in repatriating profits from Kenya in 2023 and the early months of 2024 due to a dollar supply crisis had seen foreign investors shy away from buying into the equities market.
The banking segment has been the biggest beneficiary of foreign investor purchases, with the shares of the 10 listed local lenders gaining between eight and 58 percent this year.
Four of the listed banks—Equity Group, KCB, Co-operative Band, and DTB—appear on Morgan Stanley Capital International’s (MSCI) frontier market indices, which are closely watched by foreign investors participating in the local market.
Overall, 35 out of the 58 actively traded stocks at the NSE recorded price gains over the nine months, with 19 reporting price falls and the rest remaining unchanged.
The top gainers in the period were led by listed parastatals in which the government holds a majority stake, including East Africa Portland Cement (EAPC) at 295.6 percent—despite a negative working capital—and Kenya Power (146.5 percent).
According to analysts, these two stocks have largely been pushed by speculation, in the absence of significant fundamental price drivers for their rally.
Other top gainers include Bamburi Cement at 63.9 percent, driven by the announcement of rival takeover bids priced at Sh65 and Sh70 per share and the issuance of a Sh18.25 per share special dividend that was paid at the end of September.
KCB is up by 58.5 percent this year, helped by its return in May to the main MSCI frontier markets index from the small-cap index, which has boosted its foreign investor participation numbers.
Carbacid, whose takeover offer of fellow listed firm BOC Gases cleared a legal hurdle at the Capital Markets Tribunal last month, saw its share rally by 51.67 percent in the first nine months of 2024.
Other firms with large gains include KenGen (49.3 percent), Liberty Kenya (45.3 percent), EABL (35.8 percent), and I&M Group (34.3 percent).
