NSE shrugs demos as market cap rises 3.6%

Trading at the Nairobi Securities Exchange remained stable during the week ended Friday as the market capitalisation recorded a 3.6 per cent jump, with investor sentiments remaining strong despite the demos that rocked the country.

The Nairobi Securities Exchange All Share Index (NASI), NSE 25 and NSE 20 share price indices increased by 3.6 per cent, 2.8 per cent and 3.4 per cent, respectively, with blue-chip companies like Safaricom, KCB and KenGen being among the biggest movers, alongside Kenya Power and Kenya Re Insurance.

NSE data shows market capitalisation closed the week at Sh2.4 trillion even as equity turnover and total shares traded decreased by 67.7 per cent and 52.4 per cent, respectively.

KenGen was the biggest mover with 9.4 million shares traded followed by KCB (3.9 million), Kenya Power (3.4 million), Safaricom (2.4 million) and Kenya Re (2.2 million shares moving).

The market generally remained bullish, an indicator of investor confidence in Kenya despite the protests that saw businesses looted in different parts of the country, with destruction of property.

The protests were witnessed in 27 counties, among them Mombasa, Nakuru, Kisumu, Uasin Gishu, Kajiado, Makueni, Machakos, Nyeri, Embu, Nyandarua, Murang'a, Laikipia and Meru, with businesses being looted mainly in Nairobi.

Businesses are estimated to lose up to Sh3 billion in foregone sales and looting per day of protests, according to private sector players, with Nairobi taking the biggest hit. Both national and county governments also lose revenues during protests.

The manufacturing sector suffered as the supply chain remained disrupted during the protests. The sector’s contribution to the Kenyan economy stands at about Sh1 trillion as per the Economic Survey.

This translates to approximately Sh2.9 billion daily in value addition, an estimated amount lost during protests according to the Kenya Association of Manufacturers.

“While some parts of the country witnessed peaceful picketing, it is regrettable that several counties experienced violence resulting in loss of life, looting, vandalism and widespread disruption of businesses and property,” Kenya Association of Manufacturers CEO Tobias Alando said.

The treasury bill auction of June 26 received bids totalling Sh14.5 billion against an advertised amount of Sh24.0 billion, representing a performance of 60.4 per cent. Interest rate on the 91-day, 182-day and 364-day Treasury bills declined.

Bond turnover in the domestic secondary market increased by eight per cent during the week. In the international market, yields on Kenya’s Eurobonds decreased by 14.3 basis points on average.