Nairobi: Despite positive local market indicators, foreign investors have remained on a steady path of divestment from the Nairobi Securities Exchange (NSE), data reveals. Over the past three months, foreign portfolio flows have consistently trended negative, with March witnessing the highest selloff at Sh1.2 billion.
Analysts find the sustained exit of foreign investors puzzling, given the NSE’s strong performance since the year’s inception. Notably, investor wealth at the bourse has surged by Sh327 billion since January 2, 2024, accompanied by a notable 22.7 percent rise in the Nairobi all-share index.
Muathi Kilonzo, Head of Equities at EFG Hermes Kenya, attributes recent exits to investors previously constrained by foreign exchange availability. However, there are also opportunistic investors capitalizing on market gains, alongside a resurgence of previously exited investors.
One such returning investor is BlackRock, the world’s largest asset management firm, reentering the NSE after a four-year hiatus. Central Bank of Kenya Governor Kamau Thugge highlights Kenya’s inclusion among 10 economies targeted for investments by BlackRock, citing its recent equity investment and positive market impact.
Despite foreign divestment, the NSE has maintained its upward trajectory in the first quarter of 2024. Liberty Kenya Holdings emerges as an unexpected market leader, with its stock price surging by 48.5 percent.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
2nd April, 2024
