The Nairobi Securities Exchange (NSE) is now showing signs of rebuff six months on with the NASI and NSE 25 index marking gains of 4.8 and 5.4 percent from July led by an improved performance from banking sector stocks.
The positive buy position by the key players in the local securities exchange signals a return in investor confidence following shocks arising from the advent of the COVID-19 pandemic.
Foreign investors ended the month of August with a Ksh.195 million net buying position of stocks at NSE ending a seven month run of sell-offs.
Market valuation of companies on the bourse slummed occasioned by the investors disposing off their holdings when the virus took its toll on the economy.
Data from the Capital Markets Authority (CMA) shows that foreign investors turned the net sellers in February through June with a net selling position of Ksh.21.9 billion having sold off stocks worth Ksh.55.7 billion against Ksh.33.8 billion buys.
Heavy foreign investor sell-offs pushed the NSE into bear territory after the reporting of the country’s first coronavirus incident on March 13 with investors marking astronomical fair value losses.
For instance, trading was halted on March 13 for the first time since the annulment of the 2017 General Elections results in 2017 as the leading NSE 20 Index slid by more than five percent forcing an automated halt to trading.
On this day, investors marked a steep Ksh.119.6 billion loss in value as foreign investors accelerated sell-offs.
By the close of March, companies listed on the exchange had lost 21 percent of their values with the Nairobi All Share Index (NASI) having marked a similar decline in the period.
Six months on, the NSE is showing signs of recovery with the NASI and NSE 25 index marking gains of 4.8 and 5.4 percent from July led by an improved performance from banking sector stocks.
The highest gains have been registered by Co-operative Bank, Equity Group, Absa and KCB which were up by 13.3, 12.6, 10.6 and 7.6 percent respectively.