UPDATE

NSE investors' wealth up Sh100bn on low corona transmision

The Q1 2021 report by CMA shows the market capitalisation grew 4.3 per cent

In Summary
  • The investors' wealth grew by over Sh400 billion on year to year basis
  • According to CMA CEO Wyckliffe Shamiah, market performance at NSE has shown considerable improvement on both equities and bonds.
NSE chief executive Geoffrey Odundo monitors daily trading at the Nairobi Bourse/
NSE: NSE chief executive Geoffrey Odundo monitors daily trading at the Nairobi Bourse/
Image: FILE

Kenya's  Covid-19 transmission rate in the first three months of the year  inspired confidence at the Nairobi Securities Exchange (NSE), pushing investors' paper wealth by Sh100 billion.

According to quarter one 2021 Capital Markets Authority (CMA) Statistical Bulletin released Wednesday, the end market capitalisation increased by 4.3 per cent during the period under review to Sh2.437 trillion compared to Sh2.33 trillion in the quarter to December. 

The investors' wealth grew by over Sh400 billion on year-to-year basis considering that the Nairobi bourse reported a market capitalisation of Sh2.016 trillion in Q1 2020. 

The country reported a consistent drop in daily new Covid-19 infection cases between January and March, dropping to a positivity rate of less than two per cent, way below a safe net of five per cent as per World Health Organisation (WHO) recommendation. 

Equity turnover during the period under review stood at Sh31.74 billion, compared to Sh27.51 billion registered in Q4.2020; a 15.34 per cent increase, confirming an increase in trading activity at the bourse during the quarter.

Share volumes traded increased by 2.91 per cent to 997.7 million compared to 969.56 million in the quarter ended December last year. 

Consequently, the NSE All-Share Index increased by 4.28 per cent closing the quarter at 158.62 compared to 152.11 recorded in Quarter 4 2020. 

CMA chief executive Wyckliffe Shamiah said market performance at NSE has shown considerable improvement on both equities and bonds.

''Generally, both year-on-year and quarter-on-quarter comparisons of key indicators show growth at the bourse,'' Shamiah said. 

Even so, the rich NSE 20 index recorded a 1.18 per cent decrease to close the quarter at 1,846.41 compared to 1,868.39 recorded in the previous quarter on the continued exit of foreign investors.

According to CMA, the Nairobi bourse recorded a net foreign portfolio 0utflow of Sh976 million as compared to an outflow of Sh11.18 billion same period last year.

Average foreign investors' participation in the first three months of the year accounted for 60.37 per cent compared to 65.97 per cent recorded in Q4. 2020 indicating a 5.6 per cent decrease. 

According to CMA, foreigners exit from the market on Covid-19 effect is not a unique situation to Kenya. Most international traders have retreated to stable markets or diversify investments to minimize risks. 

The derivatives market registered a 132.68 per cent increase in the volume traded closing the quarter at 947 contracts during the period compared to 407 contracts traded in Q4 2020.

The bond market on the other hand boomed during the quarter, with the market turnover rising to  Sh199.38 billion, compared to Sh157.98 billion registered in Q1.2020; a 26.21 per cent increase. 

Notably, the turnover recorded a 353.51 per cent increase closing the quarter at 46.83 million compared to 10.33 million recorded in Quarter 4 2020.

The number of deals also increased by 84.35 per cent.