Investors at the Nairobi Securities Exchange (NSE) gained Sh350 billion in paper wealth in the fourth quarter of 2019 compared to a similar period the previous year, signalling a 15.9 per cent growth.
Capital Market Authority’s statistical bulletin for the quarter ended December shows the market capitalisation at the Nairobi bourse grew to Sh2.54 trillion compared to Sh2.19 trillion, same period in 2018.
Equity turnover for the period stood at Sh45.01 billion, compared to Sh30.66 billion registered in the previous quarter, a 46.8 per cent increase.
Trading volume displayed the same trend, increasing by 21.27 per cent to 1.29 billion compared to 1.1 billion over the corresponding period.
Likewise, the NSE All Share Index (NASI) and the NSE 20 Share index recorded corresponding increases of 14.4 and 9.15 per cent respectively.
During the period under review the government sought to raise Sh135 billion through three Treasury Bonds and accepted Sh115.56 billion, indicating an 85.6 per cent acceptance rate.
The improved performance has been attributed to economic stability and progressive policies which have inspired hope in investors.
''While general market performance was relatively subdued in the first three quarters of the year, performance in Q4 2019, especially for the equities, has been on a positive trajectory, surpassing performance in the corresponding quarter in 2018,'' director, regulatory policy and strategy at CMA Luke Ombara said.
He said that the outlook remains positive, especially now that the government is keen on actualising its key projects under the “Big 4” Agenda which will require capital market funding.
Ombara added that the removal of interest rate caps is further expected to boost credit to the productive sectors of the economy.
The secondary bond market witnessed a decline in activity as turnover decreased by 42.59 per cent with Sh106.46 billion worth of bonds traded compared to Sh185.44 Billion traded in Q3. 2019. This was attributed to shift by investors to the secondary equities market.
The slowdown was also blamed on redemption of three corporate bonds during the quarter; namely CIC Insurance Group Plc (Sh5 billion), Housing Finance ( Sh3 billion) and Consolidated Bank Ltd (Sh1.5 billion).
The derivative market registered a 44.14 per cent decrease in trading to 205 contracts traded in Q4 2019 from 367 contracts traded in Q3 2019.
Barclays Bank, which is transitioning to ABSA, became the sixth single stock future to be listed at the NSE’s derivatives market, after Safaricom, KCB Group, Equity Bank, KenGen and EABL.
