Local investors drive NSE to year-plus high

An investor at the NSE. FILE PHOTO | NMG 

By CHARLES MWANIKI

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Summary

• The NSE 20 Share Index has now climbed past the 3,800 point mark for the first time since June last year, while the more inclusive all-share index is at a two-year high of 161 points.
• The NSE has been on the recovery path since the end of January, when it had sunk to an eight-year low of 2,789 points.
• Safaricom has gained 29.6 per cent in share price in the past 12 months to hit an all-time trading high of Sh25. It is the best performer among the large cap counters.

The Nairobi Securities Exchange (NSE) benchmark indices are at the highest level in more than a year as share prices continue to recover from a two-year slump, driven by local investor demand.

The NSE 20 Share Index has now climbed past the 3,800 point mark for the first time since June last year, while the more inclusive all-share index is at a two-year high of 161 points.

The gains have been spread across the various share segments of the market incorporating large, medium and small cap counters, hence the bigger jump in the all share index which is a market cap-weighted index consisting of all the securities on the NSE.

“The momentum has continued contrary to earlier sentiment. Foreigners have been net sellers in the last two months meaning that the market is being propped up by local institutional and retail clients,” said NIC Securities head of research Timothy Wambu.

“The locals are probably buying now because they missed the initial rally, which ran until June, which had been propagated by the foreigners. They have belatedly come to the party and they continue to prop up the market.”

The NSE has been on the recovery path since the end of January, when it had sunk to an eight-year low of 2,789 points.

Smaller firms dominate the list of top gainers over the past one year, led by TransCentury

at 50 per cent, WPP ScanGroup at 44.5 per cent, KenolKobil at 42.5 per cent and Crown Paints

at 42 per cent.

Safaricom

, the largest company at the bourse by market capitalisation, has gained 29.6 per cent in share price in the past 12 months to hit an all-time trading high of Sh25. It is the best performer among the large cap counters.

READ: Safaricom share hits all-time high

ALSO READ: Safaricom market valuation hits Sh1 trillion

The banking sector, which also carries a significant portion of the NSE’s market capitalisation, has seen eight of the 11 listed lenders record share price gains in the past year, led by KCB

at 27 per cent, National Bank at 17 per cent and DTB

at 14.4 per cent.

The banking segment is, however, also home to the worst performing stock over the past one year — HF

, which has shed 45 per cent in value since July 2016.