Kenya: Stock market drops Sh51bn in three weeks

By InstinctBusiness Apr 27, 2022 0

Investors on the Nairobi Securities Exchange (NSE) have seen their paper wealth decline by Sh51 billion since the start of this month as foreign investors continued to flee the market.

The market capitalisation opened at Sh2.43 trillion in April and had dropped to Sh2.37 trillion as of Tuesday.

Russia’s invasion of Ukraine, profit-taking and the upcoming Kenyan General Election are among the factors contributing to the market selloff.

Big companies that dominate the NSE in terms of market capitalisations are among the counters that registered significant share price declines over the review period.

Some have seen their stock prices drop ahead of closing books for dividends, underlining some investors’ rush to exit the market.

KCB Group shed the most value with its market capitalisation shrinking by Sh14.1 billion to Sh127.4 billion. Its share price fell 6.7% on Tuesday alone to close at Sh39.65.

The drop came after the bank closed its books on Monday for the Sh3 per share dividend for the year ended December.

Safaricom has shed Sh12 billion since the start of the month, falling to Sh1.35 trillion.

Equity Group’s market capitalisation dropped by Sh3.96 billion to Sh186.6 billion. The lender will close its books for the Sh3 per share divided on May 20.

East African Breweries Plc saw its market value decline by Sh3.95 billion to Sh114.6 billion.

Co-op Bank’s market capitalisation shrunk by Sh1.1 billion to Sh74.2 billion. The lender closes its register for the Sh1 per share dividend on May 20.

Foreign investors have been selling their stakes in the blue-chip firms to reduce exposure to frontier and emerging markets in the wake of the Russia-Ukraine war.

The conflict begun in February, disrupting global supply chains, capital flows, and has been driving up prices of commodities including petroleum products.

“With increased global economic shocks, the market has suffered a loss in its foreign investor participation levels in recent months with March 2022 recording the lowest level of 47.89 percent,” the Capital Market Authority said in a market review for the first quarter ended March.