Foreign investor outflows at Kenya’s securities market declined 20 percent in the first half of 2023 as compared to a similar period in 2022, according to market data from the Nairobi Securities Exchange (NSE) released on Tuesday.
The decline of outflows to 29.9 billion Kenyan shillings (about 205.8 million U.S. dollars) in the first half of 2023, from 258 million dollars in a similar period in 2022, points to the recovery of the market that has been hit by challenging local and global economic conditions. The market recorded the largest foreign exits in March — 105 million dollars — while the least in June at 10.3 million dollars, said NSE.
However, according to the NSE, while the foreigners slowed down the outflows in the first six months of 2023, they withheld investing in the market.
Foreign buys in the first half of 2023 stood at 99.8 million dollars as compared to 175 million dollars in a similar period in 2022, the NSE said.
The volatility in the market was blamed on the rising inflation globally and the tightening of the monetary policy in the developed world, making foreign investors flee in search of higher yields.
The investors dominate trading at the NSE, a situation that has exposed the market to external factors like global inflation and the Russia-Ukraine conflict.
Luke Ombara, the director of policy and market development at the Capital Markets Authority, however, noted recently that the market is on a recovery path as foreign outflows take a downward trend.
The market, whose capitalization has declined about 50 percent in two years to 10.3 billion dollars, is expected to recover in the second half of the year as foreign investors’ confidence grows, giving a boost to Kenya’s economy that is in much need of foreign exchange.
The World Bank projects that Kenya’s economy will grow by 5.5 percent in 2023, up from 4.8 percent in 2022.
