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February 17, 2019

NSE, shilling firm in face of raid

Security forces surround the Dusit hotel compound, where gunmen are holding out, in Nairobi, Kenya January 15, 2019. REUTERS
Security forces surround the Dusit hotel compound, where gunmen are holding out, in Nairobi, Kenya January 15, 2019. REUTERS

Nairobi’s financial market defied Tuesday’s terrorist attack with positive activity at the bourse and the shilling maintaining stability.

The shilling recorded a slight depreciation against the dollar to Sh101.71 from Sh101.69 the previous day but later firmed to 101.55/75.

While it is expected that investors, especially foreign will retreat from the market in times of crisis to secure their investments, they have shown continued confidence in Kenya’s capital markets.

“There seems to be a level of “defiant tolerance” that investors have developed. Both NSE and shilling are unshaken,” financial risk management and investment analyst Mihr Thaker told the Star.

A report by the Capital Markets Authority for the Quarter ending October shows foreign investor holdings were equivalent to 19.85 per cent of the 96.24 billion issued shares at the bourse, having come down from 20.2 per cent in January.

Prior to this, foreign investors held more than 20 per cent of shares issued at the NSE for the past six years. Local institutional investors account for 68.67 per cent of the total shares while local individual investors account for 11.48 per cent.

By the close of business yesterday, all indices at the Nairobi bourse were doing well, with the Nairobi All Share Index- NASI having gained 0.26 percentage points to record a value of 143.90 points.

The NSE25 gained 99.6 points to settle at a value of 3697.6 while the top 20 counters at the stock exchange–NSE20 had gained 113 basis points to reach 2843.6 points.

Yesterday NSE closed having traded 23.33 million shares valued at Sh6.08 million.

Data shows the market also remained resilient in the face of the Westgate attack. This happened despite foreign investors accounting for close to 50 per cent of participation at the bourse.

At the time, the NASI eased 0.32 percentage points to close at 124.26 while NSE20 retreated 12.4 points to close at 4739.42.

The star attraction of 14 Riverside drive is the DusitD2 Hotel under Dusit Thani Public Company. The Thai multinational hospitality company headquartered in Bangkok gained 0.51 per cent at The Stock Exchange of Thailand to close at 9.8 Thai Bhat (TBH) equivalent to Sh31.46.

The market’s resilience does not however extend to political uncertainty evidenced by NSE’s performance during the Supreme Court ruling which annulled the 2017 presidential election results.

Following the announcement by the judiciary on September 1, trading was briefly halted but restarted shortly with the market capitalisation dropping by Sh90 billion to Sh2.39 trillion.

This was followed by a Sh38 billion drop in the value of shares registered on September 4- the next day of trading which resulted in accumulative loss of about Sh128 billion.

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