- Capital markets analysts have largely blamed the fall on a considerable sell-off by foreign investors on the Safaricom
- The shilling has since shed close to 15 per cent against the greenback, trading at a new low of Sh135 yesterday.
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Investors at the Nairobi Securities Exchange (NSE) lost Sh240 billion in paper wealth in the first three months of the year as the shilling slid against major international currencies.
The shilling has since shed close to 15 per cent against the greenback, trading at a new low of Sh135 yesterday.
Quarterly Statistical Bulletin by the Capital Markets Authority (CMA) shows that the equity market capitalization declined by 11.57 per cent to stand at Sh1.76 trillion during the review period, down from Sh1.98 trillion in Q4.2022.
Capital markets analysts have largely blamed the fall on a considerable sell-off by foreign investors on the Safaricom counter amid the weakening shilling against the dollar.
The share price of the firm, a darling of investors looking for exposure in East African Community’s relatively lucrative mobile money and telecoms market has since fallen to Sh16.75 from a high of Sh42 mid-last year.
The NSE 20 Share and the NSE All Share Indices decreased by 3.22 per cent and 11.54 per cent respectively, recording 1,622.05 points and 112.76 points respectively at the end of the quarter.
Even so, equity turnover increased to Sh44.82 billion, compared to Sh17.46 billion registered in the previous quarter; a 156.71 per cent increase, confirming increased trading activity at the bourse during the quarter.
The volume of shares traded also increased by 71.33 per cent to 1,086.50 million compared to 634.17 million in Q4.2022.
Similarly, the NSE 20 Share Index recorded a 12.17 per cent decrease year-on-year. The NSE All Share Index decreased by 27.6 per cent.
End-month market capitalization recorded a 27.59 per cent decrease from Sh2.42 trillion in a similar quarter last year.
In the bond market, the government targeted to raise Sh190 billion from three re-opened Treasury Bonds, two new issues, and three tap sales issued during the first quarter of 2023.
The government accepted bids worth Sh141.68 billion from Sh164.14 billion bids received.
In the secondary bonds market, bond turnover increased by 2.68 per cent from the previous last quarter of 2022 which recorded a turnover of Sh158.27 billion compared to Sh162.51 billion recorded in Q1 2023.
This was however a 14.89 per cent year-on-year reduction from a bond turnover of Sh190.95 billion recorded in the same quarter last year.
The average foreign investors' participation during the quarter was 41.24 per cent compared to 54.84 per cent recorded in Q4.2022, implying a 13.60 per cent decrease in foreign investor participation during the quarter.