Value of shares traded rises to 33 month high as local investors dominate NSE

The value of shares traded in the month of May hit a high of Ksh16.07 billion ($190.9 million), the highest level in more than two and a half years. File 

By David Mugwe, The EastAfrican

The value of shares traded in May hit a high of Ksh16.07 billion ($190.9 million), the highest level in more than two and a half years.

Data from the Nairobi Securities Exchange (NSE) shows that investors traded a total of 867.8 million shares, on account of block trades on two counters and increased trading of blue chip counters at a time when a at least six companies were closing their books.

The last time the volume and value of shares traded at the Nairobi bourse hit these levels was in August 2010 when a total of 1.03 billion shares valued at Ksh16.1 billion ($199.5 million) were traded.

“A number of companies were closing their books for dividends. During a period before dividends are announced and the periods after you see a lot of trading. There were also two large trades on some counters,” said Francis Mwangi, research analyst at Standard Investment Bank.

Companies such as TransCentury, TPS Eastern Africa, CIC Insurance, Diamond Trust Bank, KCB Group,

Cooperative Bank, Pan Africa Insurance Holdings and Housing Finance closed their books for dividends to be paid for the period ended December 2012.

Shareof telecommunications company, Safaricom, were the most traded and accounted for 44.48 per cent of the 867.8 million shares and 17.25 per cent of the total turnover at the Nairobi bourse last month and high demand drove prices to a new 12 month high of Ksh7.55 ($0.09).

Safaricom announced a 38.9 per cent increase in profits after tax to Ksh17.53 billion ($204.8 million) for the period ended March 2013 from Ksh12.62 billion ($152 million) for the period ended March 2012 and the highest dividend to be paid in the history of the NSE.

The telecommunications firm said that it will pay a total of Ksh12.4 billion ($144.7 million) in dividends, amounting to Ksh0.31 ($0.004) per share compared to the Ksh8.8 billion ($105.9 million) or Ksh0.22 ($0.003) paid the previous year.

Safaricom shares also accounted for 70.47 per cent of the 778.1 million shares and 28.45 per cent of the Ksh13.86 billion ($161.8 million) turnover traded by foreign investors during the month of May.

Foreign investors made purchases worth Ksh8.55 billion ($101.6 million) and sales worth Ksh5.07 billion ($60.3 million) meaning that they pumped in Ksh3.47 billion ($41.2 million) into the NSE.

Their participation stood at 42.41 per cent indicating that despite the increase in purchases and sales by foreigners, local investors dominated trading at the Nairobi bourse.

On the close of trading on Monday, the NSE 20 Share Index closed at 4,957.08 points while market capitalization stood at Ksh1.71 trillion ($20.1 billion