Investors at the Nairobi Securities Exchange lost Sh335 billion in paper wealth in May, as a major drop on Safaricom's share price hit the bourse.
Market capitalisation (the total value of all company's shares of stock) dropped by 14.3 per cent, the biggest fall in close to two years, as continued investor flight impacted the market.
The combined wealth of investors closed at Sh2.006 trillion, from Sh2.341 trillion in April 2022 ,according to the NSE barometer for the month.
This was a further drop from Sh2.425 trillion in March.
Safaricom which is the largest by market capitalisation shed about Sh40 billion when its share dropped to Sh26.55, playing a major role in the latest monthly drop.
It's share has shed about 37 per cent in value in just 12 months.
This was from a historic high of Sh41.75 witnessed last year, with the drop pushing the market cap to a near month low.
During the month, NSE-20 Index which tracks blue-chip stocks declined by 6.6 per cent, compared to 2.5 per cent.
The NSE-20 Index declined by 6.6% in May 2022 compared to a 2.5 per cent drop in April, as foreign investors continued to seek high-value offshore ventures.
The telecommunication counter recorded the highest loss (-22.8%) followed by the Investment, REIT(real estate investment trusts), commercial and services, manufacturing and banking.
“Automobiles and accessories recorded highest gain of 30.3 per cent,” the monthly Barometer released yesterday reads in part.
Other counters that had a positive performance were insurance, agriculture and investment services.
Top 10 losers were Home Afrika, Flame Tree, B.O.C Kenya, Co-operative Bank, Bamburi, Nation Media,Trans-Century, Centum, Safaricom and WPP Scangroup.
Gainers were Sanlam, Car & General, E.A Portland, Limuru Tea, Eaagads, Uchumi, BK Group, Nairobi Securities Exchange, Unga Group and ABSA.
“Sanlam led the pack with a gain of 37.0 pr cent month-on-month and Scangroup with the highest loss of (-27.9%),” the report notes.
Equity turnover increased by 84.2 per cent in May 2022 from Sh5.9 billion to Sh10.8 billion.
This is a ratio that measures the proportion of a company's sales to its stockholders' equity. The intent of the measurement is to determine the efficiency with which management is using equity to generate revenue.
The bonds turnover decreased by 17.5 per cent from Sh71.4 billion to Sh58.9 billion as investors concentrated on purchasing new securities at the primary market.
The market has taken a hit from the recent upward review of the federal rate in the US and the ongoing rift between Russia and Ukraine.
In the first three months of the year, market capitalisation at the bourse dropped to Sh2.43 trillion compared to Sh2.6 trillion same period last year, the latest Capital Markets Soundness Report indicates.
This wiped out up to Sh176 billion off counters as foreign investors left to invest abroad.
"The performance of the capital markets continues to be impacted by the growing list of global economic shocks that continue to tilt the macroeconomic environment, within which all operations and investments are anchored,'' CMA boss Wyckliffe Shamiah said.
The global economic outlook for 2022 has been projected lower at 3.6 per cent in April 2022 from 4.4 per cent by the International Monetary Fund (IMF), as a result of the humanitarian crisis brought about by the Russia-Ukraine war.
This has led to serious trade disruptions with the current sanctions imposed on Russia expected to have
a major impact on global macros mainly exchange rates, supply chains, inflation and the capital markets.
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