• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

NSE is Africa’s third worst performing stock market

3 years ago
in Business, Features, highlights, Home, home-news, latest News, Markets
2 min read
0 0
0
64
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

NSE is Africa’s third worst performing stock market

The Nairobi bourse is the third worst-performing major stock market in Africa since January, hit by foreign investor capital flight and ease of repatriation of equity sales compared to other capitals in the continent.

The Nairobi Securities Exchange (NSE) was ranked eighth among the 10 top stock markets in the continent with a return of negative 30 percent in dollar terms since the year started, wiping out Sh789 billion of investor wealth

Ghana and Egypt tied as the worst-performing markets with returns of negative 32 percent in ranking that put the Nigeria Stock Exchange as the top performer on 21 percent returns, market analysis done by investment bank EFG Hermes shows.

The performance of African stock markets has recently been weighed down by a reduced appetite for emerging markets after a jump in interest rates in the developed markets such as the US, which are currently battling high inflation that has forced their central banks to adjust rates upwards.

This flight of capital to the US market — where inflation is at a 40-year high of 8.6 percent —and other developed nations has triggered steep price falls of African blue-chip firms listed that are a favourite of foreign investors.

Kenya has suffered more pain, given that its market is dominated by foreigners—who account for 55 percent of turnover—and the lack of restrictions on moving foreign exchange in and out of the country.

RelatedPosts

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

On the other hand, it has been difficult to move capital from Nigeria, forcing investors to either stay put or rebalance their portfolios within the market.

“Despite a reported dollar scarcity locally and in several other African countries, the Kenyan market seems to be the least restrictive in terms of dollar access and hence makes it easier for foreigners to sell off. Additionally, the NSE is fairly liquid compared to other regional exchanges,” said Solomon Kariuki, head of research at AIB-AXYS Africa.

The value of NSE has fallen to lows last seen in 2017.

The value of all stocks stood at Sh1.847 trillion compared to Sh2.636 trillion at the start of the year, while the NSE main index has dropped to a 19-year low on foreign investors’ flight.

The NSE-20 Share Index closed at 1,580 points, a level last seen in 2003.

The plunge at the Nairobi bourse comes on the back of Safaricom share price, which accounts for more than half of the stock market valuation and has shed 38 percent since January to Sh24 from Sh37.95 per share in January.

Foreigners have an outsized exposure to the stock, owing to its large liquidity and business performance, including profits and dividends.

“Safaricom is the most exposed name to the sell-off globally as it had attracted cross over emerging markets money,” said Muathi Kilonzo, a director and head of equities at EFG Hermes Kenya.

“Secondly, the shortage of foreign currency to repatriate proceeds to international investors, at times going on weeks, has also created a vicious cycle where concerns of being trapped drive selling. Unfortunately, investors have an ongoing bad experience of being trapped in Nigeria.”

Local institutional investors have at the same time failed to step in and provide demand for the stocks as foreigners sell off, and are instead pushing their capital to fixed-income investments such as government bonds– which are currently offering better returns and safety compared to equities.

Mr Kilonzo says investors are concerned with Kenya’s macroeconomic conditions including high inflation and a depreciating shilling—which has dented the purchasing power of Kenyans and hurt consumer stocks such as EABL.

The shilling’s performance of the dollar is a big factor at the stock market for foreign investors, who suffer exchange losses or make gains depending on whether it is depreciating or appreciating against the greenback.

When entering the market, foreign investors convert their dollars to shillings and do the reverse after selling to shift capital out of the country.

Should the currency depreciate between the purchase and sale periods, they suffer losses since they stand to get fewer dollars when exchanging for exit purposes. Should it gain, they enjoy more dollars on exit.

This year, the shilling has depreciated by 3.9 percent to the dollar, exchanging at a mean of 117.50 yesterday, which when coupled with the capital losses on major stocks has foreign investors looking at major portfolio erosion.

Source: businessdailyafrica
Tags: African stock marketsghanaNairobi Securities Exchange (NSE)NSE is Africa’s third worst performing stock market
No Result
View All Result

Highlights

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

Banking Sector Soundness Remains Robust in 2024 Amid Strong Profitability, Adequate Capital Buffers

Sha’Carri Richardson Withdraws from US Trials Following Arrest

From Singuluma to El Kaabi: Can CHAN 2024 Unleash the Next Hat-trick Hero?

Ghana to Welcome King’s Baton Relay on August 8 Ahead of 2026 Commonwealth Games

Trending

Features

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

August 2, 2025

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes Parliament has adjourned...

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

August 2, 2025

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

August 2, 2025

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

August 2, 2025
Bank of Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

August 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.