RECORD HIGH

Investors' wealth at NSE up Sh630bn in third quarter

The bond market turnover also increased in Q3 by 11.01 per cent

In Summary
  • Market cap grew to Sh2.778 trillion compared to Sh2.148 trillion same period in 2020.
  • The NSE All-Share Indices increased by 5.38per cent  and 2.75per cent respectively
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

Shareholders' wealth at the Nairobi Securities Exchange hit the highest level ever on a year-on-year basis in the first nine months of 2021, driven by recovery from the effects of Covid-19.

The Capital Market Authority's Q3 statistical bulletin shows market capitalisation at the Nairobi bourse grew to Sh2.778 trillion compared to Sh2.148 trillion same period in 2020.

This translates into paper wealth growth of Sh630 billion during the period under review. 

However, investors' paper wealth grew by Sh76.5 billion on a quarter to quarter basis, a 2.83 per cent increase compared to a market capitalisation of Sh2.702 trillion in Q2. 

According to the report, the performance at the Nairobi bourse generally recorded increased performance following easing of Covid-19 restrictions by the government. 

The NSE All-Share Indices increased by 5.38per cent  and 2.75per cent respectively in Q3 recording 2.031.27 points and 178.31 points respectively at the end of the quarter.

The bond market turnover also increased in Q3  by 11.01 per cent with Sh301.10 billion worth of bonds being traded compared billion traded in Q2. 

However, the equity  turnover at the Nairobi bourse during the period under review stood at Sh31.36 billion, compared to Sh37.99 billion registered in the previous quarter.

The  17.45 per cent decrease confirms decreased in trading activity at the bourse during the quarter.  Similarly, the volume of shares traded decreased by 13.93per cent to 946.48 million in Q3 compared to 1,099.65 million in Q2.

Top 10 companies at the bourse controlled 89.94 per cent of the total market capitalisation, with Safaricom accounting for almost 60 per cent. 

The which also include  Equity Bank, KCB, East Africa Breweries, Coop Bank, Absa,Standard Chartered Bank, BAT, NCBA and I&M accounted for Sh2.5 trillion of the total market capitalisation.  

The derivatives market registered a 34.6per cent  decrease in the volume traded closing the quarter at 2,115 contracts in Q3 compared to 3,234 contracts traded in Q2 2021.

Similarly, the turnover recorded a 42.29 per cent decrease closing the quarter at 78.52 million compared to 136.07 million recorded in Quarter 2. 

The number of deals also decreased by 52.26 per cent in Quarter 3 closing the quarter at 719 deals from 1,506 deals registered in the previous quarter.

Similarly, the number of deals increased by 392.16 per cent during the Quarter, closing the quarter at 1,506 deals, up from 306 deals registered in the previous quarter.

As at June 30, 2021, the total assets under management by the CIS were Sh117.77 billion, a 6.08per cent increase from Sh111.09 billion managed in quarter ended March 31, 2020.

CIC Unit Trust Scheme led the pack with the largest portion of the funds at Sh47.29 billion, followed by NCBA Unit Trust Scheme which managed Sh14.81 billion in the same period.

Nabo Capital registered the highest percentage increment of 37.52 per cent recording Sh2.4 billion as at  June 30,2021 from Sh1.78 billion  recorded in the previous quarter.

On the other hand, Amana Unit Trust funds recorded the highest decline of funds managed by 40.35per cent, reporting Sh45 million in Q2 from Sh75.6 billion  in Q1.

During the period, CMA approved several restructuring plans including the application by Nairobi Business Ventures Ltd to issue a Shareholder’s Circular in relation to proposed investments in Air Direct portfolios.

It also approved  an application by East African Breweries Limited for the establishment of a MediumTerm Note Programme of up to Sh11 billion and listing of all the issued notes on the Nairobi Securities Exchange.

The regulator also gave a nod to an application by African Diaspora Asset Managers Limited relating to the registration of the ADAM Unit Trust Fund comprising of the Adam Equities Fund, Adam Money Market Fund, Adam Balanced Fund and Adam Fixed Income Fund.