NSE hits 57-month high as shilling strengthens

PHOTO | SALATON NJAU | FILE The Nairobi Securities Exchange  NATION MEDIA GROUP

By JOSHUA MASINDE jmasinde@ke.nationmedia.com

In Summary

• The NSE 20 Share Index crossed the 5,000 mark for the first time since July 28, 2008

The stock market rallied to a 57-month high while the shilling posted the strongest performance in six months in a show of growing investor confidence following the peaceful conclusion of the presidential election petition.

The NSE 20 Share Index crossed the 5, 000 mark for the first time since July 28, 2008 to close at 5030.91 points.

Analysts have attributed the impressive performance to the prevailing positive sentiments following the peaceful conclusion of the election petition in which outgoing Prime Minister Raila Odinga had sought to challenge Uhuru Kenyatta’s election as president on March 4.

“The market is being driven by positive sentiments and not fundamentals. The United States government and the European Union said they are going to work with the Kenyan government which sends positive signals to the market,” ABC Capital general manager Samwel Kiraka said on the phone.

Standard Investment Bank analysts said the bourse opened the week on a high note with gains being registered across almost all counters traded.

“Equity turnover jumped 96 per cent with most of the trades being generated by local investors who accounted for 66 per cent of trades compared to 59.4 per cent in the previous session,” SIB analysts said in their daily report.

Market capitalisation on the other hand rose to Sh1.649 trillion on Tuesday from Sh1.599 trillion at the close of trading on Thursday last week.

Commercial banks quoted the shilling at 84.85/85.05 against the dollar the close of trading, a level last seen in October 17 2012. The Central Bank quoted the shilling at a mean of 84.98 against the dollar.

According to Kenya Commercial Bank senior dealer Chris Muiga, the peaceful political atmosphere has provided the necessary support for the shilling.

However, Mr Muiga termed the strong performance “a short term trend” that is bound to be affected by the absence of fundamentals needed to support the currency.