Offshore investors hastened an exit from the Nairobi Securities Exchange (NSE) in October, recording a net selling position of Sh569.9 million on jitters including the November 5 US elections.
Market data shows the NSE foreign portfolio flows reversed a narrow net buying position of Sh28.6 million in September and marks the eighth month of outflows by offshore investors this year.
The net exits by offshore investors are attributed partly to jitters surrounding the upcoming US elections with many of them adopting a wait-and-see stance as the world’s largest economy goes to the ballot to elect its new President.
US Vice President Kamala Harris takes on former President Donald Trump on Tuesday in a closely watched race for the White House.
“The US election is a big event, investors looking at emerging and frontier markets will have more conviction on whether to deploy their funds,” Muathi Kilonzo an executive at EFG Hermes investment bank said in a previous interview.
Offshore investors had been widely expected to gradually turn into buyers of NSE-listed stocks following the start of interest rate cuts in advanced economies including the US in September.
The return of the foreign investors has however yet to materialise so far even as the NSE sees notable tailwinds including a recovery to market performance in 2024 while the bourse has seen positive reviews from key global indexes including the Morgan Stanley Capital International (MSCI) and the FTSE Russell Index.
The number of foreign investors on the bourse across nine months to the end of September has also dropped to 8,520 from 8,614 investors at the end of last year.
Foreign investor exits accelerated in 2023 dropping from 14,141 at the end of 2022.
Part of the foreign investors have had a growing bias for Asian markets including India and China which have offered comparatively higher returns.
NSE foreign portfolio flows remain negative at an outflow position of Sh429.2 million on a year-to-date basis.
The NSE has however seen a better performance, rallying nearly 30 percent supported by a reactivated retail investor base which has challenged foreigners for the control of market activity.
The Nairobi All Share Index (Nasi) for instance ended last week up 27.6 percent on a year-to-date basis or 117.61 points from 92.11 points on December 29.
Investor wealth has meanwhile grown by Sh41 billion, touching Sh1.84 trillion from Sh1.43 trillion since the start of 2024.
Foreign investors recorded net inflows to the bourse in September, June, May, and April with May seeing the highest net inflow position at Sh1.49 billion.
