The Nairobi Securities Exchange (NSE) shed Sh42.9 billion in investor wealth on Tuesday as most listed stocks went into the red in renewed selloff pressure. FILE PHOTO | SHUTTERSTOCK
The Nairobi Securities Exchange (NSE) shed Sh42.9 billion in investor wealth on Tuesday as renewed selloff pressure pushed most listed stocks into the red.
The bourse’s market capitalisation plummeted to Sh1.674 trillion from Sh1.717 trillion on Monday as major counters retreated on the day.
Read: NSE sheds Sh182bn after Supreme Court ruling
Safaricom’s share price for instance contracted by 5.9 percent in Tuesday’s trading session to Sh16.80 from Sh17.85 previously.
Other major counters to mark the valuation decline included KCB, NCBA, Co-operative Bank and BAT.
The Nairobi all share index, the NSE20 and NSE25 indexes shed 2.74, 5.51 and 33.19 points respectively to close at 107.52, 1597.89 and 2822.84 points.
The retreat of the market is despite upcoming book closures which are usually expected to hold up the market.
Safaricom’s book closure is for instance set for Friday this week after which the company is expected to pay a final dividend of 62 cents per share on August 31.
Book closures scheduled for next month meanwhile include BAT, Williamson Tea and Kapchorua Tea.
Part of the knock on the valuation of NSE-listed stocks is attributable to reduced market activity as foreign investors resume selloffs driven largely by negative investor sentiment in emerging and frontier economies.
As at the end of last week, the three NSE indexes year to date performance posted losses of 13.1, 3.7 and 8.7 percent respectively.
NSE stocks remain undervalued as the market trades at a price-to-earnings ratio of 5.6 times against a historical average of 12.3 times.
Read: Where investors made billions in the first six months of 2023
Activity at the NSE has further been truncated by competition for higher returns from other asset classes, especially fixed income.
→ kmuiruri@ke.nationmedia.com
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