The Nairobi Stock Exchange has been the third worst major stock market in Africa as of January, hit by capital flight by foreign investors and easy repatriation of stock sales compared to other continent capitals.
The Nairobi Die Securities Exchange (NSE) ranked eighth among the continent’s top 10 stock markets with a year-to-date return of -30 percent in dollar terms, wiping Ksh789 billion of investor wealth
Ghana and Egypt tied as the worst A market analysis by investment bank EFG Hermes reveals a market analysis by investment bank EFG Hermes.
The performance of African equities Markets have been rising recently weighed down by reduced appetite for emerging markets after interest rates in developed markets such as the US jumped ers currently battling high inflation that has forced their central banks to raise interest rates.
< p> This flight of capital into the US market – where inflation is at 8.6 percent at a 40- yearly high – and to other developed nations has led to sharp falls in listed African blue-chip companies that are popular with foreign investors.
READ ALSO: US interest rate hike hurts Kenyan investors and companies
Kenya has suffered more pain as its market is dominated by foreigners – who account for 55% of sales – and there are no restrictions on the transfer of foreign exchange in and out of the country.
On the other hand, it has been difficult to move capital out of Nigeria, forcing investors to either stay or rebalance their portfolios within the market.
“Despite a reported dollar shortage locally and in several other African countries, the Kenyan market to be the least restrictive in terms of access to dollars and therefore easier for foreigners to sell. In addition, the NSE is quite liquid compared to other regional exchanges,” said Solomon Kariuki, Head of Research at AIB-AXYS Africa.
The value of the NSE has fallen to a low last seen in 2017.< /p >
The value of all shares stood at ATS 1.847 trillion compared to ATS 2.636 trillion at the start of the year as the main NSE index fell to a 19-year low as foreign investors fled.
The NSE-20 stock index closed at 1,580 points, a level last seen in 2003.
First published by Business Daily. Read more here em>