In March, the Nairobi Securities Exchange (NSE), east Africa’s biggest bourse and Kenya’s only such institution, recorded a six-year low of 30.1% in foreign investment, data from Kenya’s Capital Markets Authority (CMA) shows. Local investors are keeping it afloat. Last year, foreign investors pulled out $170 million from the Kenyan stock market, citing escalating global risks. This worsened the plunge in share prices of NSE-listed firms, especially commercial banks. Telecom major Safaricom, NSE’s biggest scrip by average capitalization, lost 36.4% of its value, adding to foreign investors’ fears. Usual top performers like Equity Bank, Kenya Commercial Bank, and Co-operative Bank of Kenya, all recorded share price devaluation. This was triggered by a reduced appetite for Africa’s capital markets, following a hike in interest rates in developed markets like the US. As a result, central banks in African countries were forced to adjust interest rates upwards, amid weakening local currencies and rampant inflation.
SOURCE: QUARTZ AFRICA
