NSE drops 27.5pc in 2023 as bear run continues

Nairobi Securities Trade buying and selling ground.

The Nairobi Securities Trade (NSE) recorded a 27.5 per cent fall in paper wealth amounting to Sh547 billion in 2023 because the multi-year bear run continued to ravage buyers’ equities portfolio.

In line with market information, the NSE closed the final buying and selling day of the yr with a valuation of Sh1.439 trillion from Sh1.986 trillion on the finish of 2022.

The Nairobi All Share Index (NASI) which tracks the efficiency of all shares fell by an analogous margin whereas the NSE 20 and 25 that monitor the efficiency of the highest 20 and 25 listed companies contracted by 10.4 and 24 p.c respectively.

The NASI index closed at 92.11 factors whereas the NSE 20 and NSE 25 indexes closed the yr at 1,501.16 and a pair of,380.16 factors respectively.

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As compared, wealth erosion for the Nairobi bourse stood at 23.3 p.c in 2022 amounting to Sh610 billion whereas the efficiency of the NSE 20 index was largely unchanged, having fallen by 10.3 p.c.

The continued bear run on the NSE in 2023 was an indication of the unrelenting exit of international buyers as fastened revenue took centre stage as essentially the most favoured asset class amid rising rates of interest in Kenya and developed economies.

International buyers favoured investing in property of their dwelling markets as central banks within the main economies elevated rates of interest to rein in inflation.

“Foreigners had been seen to choose fastened revenue and threat asset investments in top-tier developed markets. The dynamics of demand and provide in our characteristically foreign-dominated market had been imbalanced, thereby adversely affecting fairness market valuations,” analysts at Genghis Capital stated in a report printed on October 31, 2023.

Between January and September, 6,256 international buyers, representing 42 per cent of all foreigners, fled within the transfer to fastened revenue property.

Web international portfolio outflows in 10 months to the tip of October in the meantime stood at Sh19.5 billion with June and August the one months of optimistic international flows.

Within the 9 months to September, the NSE was ranked because the worst-performing African bourse in greenback phrases in a transfer that highlighted the influence of international exits and world shocks.

The Morgan Stanley Capital Worldwide-MSCI index which tracked three Kenyan blue chips — Safaricom, Fairness Group and EABL — revealed losses of 41.9 p.c with Zimbabwe following at 34 p.c.

Going into the New Yr, the NSE is anticipated to see some respite from anticipated rate of interest cuts in superior economies which might flip the tide of international investor exits.

The Capital Markets Authority says the NSE is poised to rebound, supported by enticing entry factors for buyers, represented by low inventory valuations.

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