Nairobi bourse paper wealth declines by massive Sh419bn

Nairobi Securities Exchange CEO Geoffrey Odundo. FILE PHOTO | NMG 

In Summary

• The Nairobi Securities Exchange has registered one of the worst full-year performances in its recent history.

By GEOFFREY IRUNGU
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Investors’ paper wealth in the Nairobi Securities Exchange-listed companies fell by a staggering Sh419 billion last year to register one of the worst full-year performances in recent memory.

Market capitalisation of the firms listed on the exchange stood at Sh2.102 trillion as of December 31, down from Sh2.521 trillion on January 2, last year. This was a 17 percent decline compared to a gain of 32 percent in 2017.

“Market capitalisation stood at Sh2.1 trillion against Sh2.5 trillion posted at the close of year 2017; this represented a decline of 17 percent in market value,” said the NSE in an update on the equity market.

The fall in paper wealth was also reflected in the prices of blue chips as shown in the NSE 20-share index, which declined by 23.66 percent to stand at 2833.84 points compared to a gain of 16.5 percent in the previous year. The all-inclusive NSE All-Share Index (NASI) fell by 18 percent in 2018, nearly mirroring market cap decline.

“The bourse closed the year with the benchmark index, the NSE 20 share index, down 23.66 per cent to stand at 2833.84. The all-inclusive NASI shed 17.97 percent to settle at 140.43. The NSE 25 share index shaved off 731.79 points or 17.08 percent to settle at 3551.59 points,” said the NSE.

There was, however, a slight increase in the value of shares transacted (turnover) during the year, which stood at Sh175 billion, 2.37 percent up from the value posted in the previous year.

The banking sector had the highest value of transacted shares, standing at Sh64.9 billion or 36.96 percent of the year’s traded value.

Equity Bank’s shares had the biggest value traded in the sector, amounting to Sh27.6 billion with KCB Group coming second at Sh21.9 billion.

The banking industry was closely followed by the telecoms sector, represented by Safaricom, that traded a total annual value of Sh62 billion or 35.37 percent of the year’s total NSE transacted value.

In a client update, Standard Investment Bank (SIB) said that foreigner investors ended the year in a net selling position of Sh80 million or $800,000.

“Foreign investors ended the year in a net selling position, recording net outflows of $0.8 million, as their participation increased from 52.5 to 77.4 percent,” said the SIB.

The investment bank further said that of the listed entities, only some 11 counters had recorded positive year-to-date performance, namely, Barclays, Stanbic, Express Kenya, KenolKobil, Total Kenya, Liberty Kenya, Unga Group, Stanlib Fahari I-Reit, Kapchorua Tea, Limuru Tea and Car & General.

The energy and petroleum sector traded shares amounting to a total of Sh19.69 billion and accounting for 11.21 percent of the traded value during the year.

“KenolKobil recorded a 36.07 percent gain to close the year at Sh19.05 with shares worth Sh17 billion transacted. Kenya Power & Lighting was down 55.27 percent to Sh4.07 moved 206 million shares valued at Sh1.1 billion,” said the NSE.

The manufacturing and allied sector moved shares worth Sh17.2 billion, which accounted for 9.82 per cent of this year’s traded value.

“East African Breweries was the most actively traded counter in this sector during the year, with 59 million shares valued at Sh13 million changing hands at between Sh160 and Sh270.

“BAT shares slipped by 4.61 per cent to close the year at Sh725 with shares worth Sh3.2 billion transacted,” said the NSE.