Foreigners have sold NSE stocks worth Sh2.3 billion in the past three months, according to new market data. Despite improvements in local equities, foreign investors continued to withdraw from the Nairobi Securities Exchange in the first quarter of this year.
Data reveals that foreign portfolio flows were negative throughout the three months, with the largest sell-off occurring in March at Sh1.2 billion. In January and February, investors withdrew Sh106 million and Sh1 billion from the market, respectively.
This trend persisted despite positive factors such as gains in the domestic exchange rate and improved investor sentiment following the partial redemption of Kenya’s debut $2 billion (Sh264.85 billion) Eurobond. The ongoing departure of foreigners remains a puzzle, considering the NSE has delivered gains to investors since the beginning of the year.
Investor wealth at the bourse has surged by Sh327 billion since January 2, 2024, with the Nairobi all-share index increasing by 22.7 percent to 113.09 from 92.11 points on December 29, 2023. According to Muathi Kilonzo, head of Equities at EFG Hermes Kenya, foreign investors have been actively trading amongst themselves, with some who were previously unable to exit due to foreign exchange constraints now leaving the market to mirror the selling position.
BlackRock, the world’s largest asset management firm, recently re-entered the NSE after a four-year hiatus, signalling a renewed interest in the market. Despite the negative foreign portfolio flows, the NSE has shown positive momentum in the first quarter. Liberty Kenya Holdings has led a market rally, with its stock price climbing 48.5 percent to Sh5.48 by March 28.
Other notable gainers include Equity Group, up 40.1 percent to Sh47.15, and Co-operative Bank, up 31.5 percent to Sh15. On the flip side, Home Africa has recorded a year-to-date loss of 18.9 percent, trading at 30 cents from 37 cents at the end of last year. Several other stocks, including Kakuzi Plc, BK Group, Express Kenya, Longhorn Publishers, Nairobi Business Ventures, and Unga Group, have also experienced losses.
Despite the stock market’s double-digit gains, analysts are cautious about labelling the rally a bull run, which typically signifies a prolonged period of rising stock prices and positive investor sentiments.
