The Nairobi Securities Exchange (NSE) has slid into an unending bear-run, with key indices and stocks falling on local and global shocks that include jitters over Kenya’s Aug. 9 elections, the ongoing Russia-Ukraine conflict, and rate hikes by central banks in western economies.
The NSE benchmark index, which measures the performance of the 20 best stocks, is at a 19-year low, standing at 1,616.14 points on Tuesday, a level last witnessed in March 2003.
The index has declined as top stocks including Safaricom, Equity Bank, and Kenya Commercial Bank (KCB) fall due to foreign investors’ exit.
Safaricom, for instance, hit a 52-week low of 23 shillings (0.19 U.S. dollars) on Tuesday.
Stock dealers noted that the market has been weighed down by foreigners exiting due to shocks over Kenya’s upcoming elections and a rise in interest rates in markets like the U.S.
Anne Nalo, a senior policy formulation and analysis officer at the Capital Markets Authority, observed that since the majority of the investors at the NSE are foreign, they are affected by global shocks like the Russia-Ukraine conflict thus cutting trade at the market-leading to decline.
Foreign investors account for up to 80 percent of trading in the market.
Analysts expect the bear-run to persist, impacted by the growing list of global economic shocks that have tilted the macro-economic environment. Enditem