By CHARLES MWANIKI
Investor wealth at the Nairobi Securities
Exchange (NSE) grew by Sh214 billion between January and April, a
summary of trade data in the first four months of the year has showed.
The stock market’s measure of share price
movements, the NSE 20-Share Index, gained 17.06 per cent in the period
to close at 4,765 points on April 30.
“Market capitalisation hit a historical mark of
Sh1.6 trillion, gaining Sh214 billion in the period January to April
2013,” noted the NSE in the report released on Wednesday.
The market performance went against expectations
that the bourse would take a hit from the political risk surrounding the
March General Election and the presidential petition that followed.
The sentiment has, however, now shifted to
expectations of higher growth, especially with the boost from the
Central Bank of Kenya that on Tuesday cut its lending rate from 9.5 per
cent to 8.5 per cent.
“We expect capitalisation at the bourse to grow as
a result. CBK has signalled it will increase liquidity in the market
with its lending rate action, and so we expect some of this cash to find
its way to the bourse,” said Suntra Investment Bank research analyst
Johnson Nderi.
Equity turnover, however, has fallen in the past
three months, having gone up in February following high sell-offs of
shares by foreign investors.
Foreign investor participation fell from 56 per
cent in February to 48 per cent in March compared to equity turnover,
decreasing further to 43 per cent in April. This reflects the heightened
selling activity before the Elections due to profit taking and flight
from political risk
In February, Equity turnover stood at Sh14.6
billion, dropping to Sh11.18 billion in March and further to Sh9.8
billion in April.
The NSE has recorded a sustained share price gain
throughout 2012 to early 2013, making some stocks ripe for capital gain
sell-off. The NSE 20-Share index gained 28.95 per cent in 2012, closing
at 4,133.02 points from 3,205.02 points in 2011.
In the past three months, several stocks including the blue chip counters of Nation Media Group, Safaricom, East African Breweries and Kenya Commercial Bank have touched one year highs increasing the level of the wealth.
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