All Share Index volatile as prices at Kenya’s NSE dip

Traders at Uganda Securites Exchange. The All Share Index is a measure of the performance of both local and cross-listed firms. PHOTO BY RACHEL MABALA. 

By FARIDAH KULABAKO

In Summary

This means holders of cross-listed stocks are losing money because of a fall in stock prices.

Kampala

The All Share Index at the Uganda Securities Exchange (USE) was unstable during last week, dropping slightly Friday following Wednesday’s drop on the back of volatile stock prices in the Kenyan market. The fall in the all share means that investors in cross-listed stocks are losing money because of a fall in stock prices.

The All Share Index shows the changing average value of share prices of listed companies and is also used as a measure of how well a market is performing. Although the All Share index slightly dropped to close at 1515.89 points Friday, it dropped by 0.8 per cent to 1,528.61 points on Thursday, compared to 1,520.59 points registered on Wednesday. The turnover increased to Shs43 million Friday, down from Shs25 million the previous day and Shs123 million on Wednesday.

Market experts
Market analysts attributed the volatility trends to a fall in prices of cross-listed securities on the Nairobi Securities Exchange (NSE), which are said to have a bigger weight on the all-share index compared to the local firms. “The All Share Index is a measure of the performance of both local and cross-listed firms, yet cross-listed firms have a bigger market capitalisation compared to local firms. So any price movement in the cross-listed firms affects the index in Uganda,” said Mr Henry Kakande, research analyst at Crested Stocks and Securities.

Mr Edgar Mutebi, a dealer at UAP Financial Services echoed similar reasons, saying cross-listed firms have greater weight on the index compared to local ones.

The NSE 20 share index fell to 4,932.77 points on Wednesday, down from 5,020.50 points on April 12, and analysts in Kenya attributed it to profit-taking after the February elections. “The market has pulled back slightly on profit-taking after the recent rally,” Ms Faith Atiti, an NIC analyst, was quoted.

The USE has seven cross-listed firms with roots in the Kenyan market, which include Equity Bank, Kenya Airways, East Africa Breweries Limited, Kenya Commercial Bank, Jubilee Holdings Limited, Nation Media Group and Centum.