daniel chigunweEast African securities markets have fallen by an average of 17 percent in a year, as foreign investors continue dumping shares of blue-chip companies in favour of high-yielding investments in the US and Europe, buoyed by soaring interest rates in the developed markets.
The Kenyan market
East African securities markets have fallen by an average of 17 percent in a year, as foreign investors continue dumping shares of blue-chip companies in favour of high-yielding investments in the US and Europe, buoyed by soaring interest rates in the developed markets.
The Kenyan market is the hardest hit by the foreign investor exits, with the Nairobi Securities Exchange (NSE) All Share Index (NASI) plunging by 30,74 percent to 89,35 as at November 13, from 129,02 on November 14, 2022.
This is followed by the Uganda Securities Exchange (USE)’s USE All Share Index plummeting 27 percent to 896,25 from 1 230,28 in the same period.
Tanzania and Rwanda markets fell by 6,67 percent and 2,48 percent respectively. In Tanzania, the DSE All Share index fell to 1 745,24 from 1 870,06 while in Rwanda, the RSE All Share Index declined to 143,83 from 147,5 during the period under review.
During the week ending November 10, foreign investors remained net sellers on the NSE for the fifth consecutive week with a net selling position of $2,1 million, from a net selling position of US$300 000 recorded the previous week, taking the year-to-date foreign net selling position to US$287,6 million.
Analysts say the high foreign investor sell-offs will continue weighing down the regional equities outlook in the short-term, in the wake of depreciating currencies and uncertainty of availability of dollars in regional markets.
“Foreign investors are mainly interested in large companies because that is where they put their money and so when they decide to leave, those are the same companies they remove their money,” says Paul Mwai, NSE’s Vice Chairman and Chief Executive of AIB-AXIS Capital Ltd. — The East African.
Online Reporter