EABL tops foreign investors’ buy list

An investor looks at the digital electronic board at the Nairobi Securities Exchange. FILE 

By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com

In Summary

• Foreigners inflows into NSE rose by Sh10 bn, hitting Sh34 billion last year.

Foreign investor net inflows into the Kenyan stock market rose by Sh10 billion hitting Sh34 billion in 2013, as East African Breweries and Nation Media Group recorded the highest uptake by international buyers, the NSE annual trade data has showed.

The last three months of 2013 saw the lowest net foreign investor inflows of Sh3.2 billion while the third quarter recorded the highest (Sh13.7 billion) compared to Sh9.3 billion in the second quarter and Sh7.8 billion in the first quarter, according to the data compiled by Standard Investment Bank.

Total equity turnover at the Nairobi Securities Exchange (NSE) hit a record Sh155 billion last year, as investors sustained participation in the stock market defying the General Election jitters.

Analysts attributed the sharp drop in fourth quarter inflows to the expected tapering of US stimulus programme, which will see the world’s biggest economy stop monthly injections of up to $85 billion through treasury bond purchases.

“In 2012 and 2013, the bond buying in the US had a huge impact on foreign inflows to frontier markets,” said Sterling Capital trader Eva Njuguna.

Foreign investors on a net basis bought EABL shares worth Sh7.2 billion, followed closely by Nation Media Group at Sh7.1 billion. Nation Media is the publisher of the Business Daily newspaper.

READ: Foreign ownership of shares at NSE rises to seven-year high

The media group in August reported a block foreign trade of Sh5.99 billion, which lifted monthly turnover to the highest ever recorded at the NSE.

Other counters which saw active foreign interest in the year— Safaricom, KCB and Equity Bank—recorded net inflows of Sh5.2 billion, Sh3.8 billion and Sh3.5 billion respectively.

The three counters surged touching all-time highs during the year, with Safaricom in particular doubling its price to close the year at Sh10.85 up from the 2012 closing price of Sh5.05.

Cement maker Bamburi recorded the highest net foreign investor outflows of Sh802 million, while Kenya Airways and Jubilee Holdings saw outflows of Sh275 million and Sh49 million respectively.

The expectation among analysts is that the demand by foreign investors will continue into the first quarter of 2014 at least.

“We opine that the foreign investors are taking long positions on specific large cap counters in preparation for the market rebound in quarter one 2014,” said Genghis Capital research.

Forex traders also pointed at foreign inflows from the oversubscribed Treasury infrastructure bond issue, which attracted bids worth Sh37.63 billion against the Sh20 billion on offer, as a source of liquidity from international investors which drove up activity in September.

Kenya’s relatively low inflation rate during the year, an accommodative monetary policy and stable macro-economic helped to attract foreign investors.