Foreign investors drive NSE trading as locals break for festivities
NSE staff monitors stock trade on the electronic board. FILE PHOTO | NMG
What you need to know:
- Foreign participation in equity turnover has averaged 75 per cent in the past three weeks, up from an average of 56 per cent in the preceding one month.
- This year, the foreign investor share of turnover stands at 63 per cent.
Foreign investors have accounted for a larger share of trading turnover at the Nairobi Securities Exchange (NSE) in the past three weeks as local funds take a back seat during the festive season.
Market data compiled by Standard Investment Bank (SIB) shows that foreign participation in equity turnover has averaged 75 per cent in the period, up from an average of 56 per cent in the preceding one month.
This year, the foreign investor share of turnover stands at 63 per cent.
Analysts say that there is reduced activity from local institutional investors, leaving the bulk of trading in the hands of foreigners and local retail investors.
These retail investors, however, do not trade heavy volumes like their institutional counterparts and therefore account for a lower share of traded turnover.
“Most of the local institutional investors have closed their books for trading in 2017,” said Genghis Capital in a market note.
“We expect local participation to be supported by retail trading.”
The market’s total turnover is, however, likely to come down on average in the last week of the trading year as investors break for the Christmas holidays.
The SIB data shows that the most popular counters for foreign investors remain the blue chips such as Safaricom, EABL, KenolKobil and KCB.
