Investors on the Nairobi Securities Exchange (NSE) lost Ksh777.83 billion ($6.37 billion) in nine months as the value of listed companies fell by 28% between January and September amid a persistent bear run on the struggling bourse.
According to the Central Bank’s monthly economic data, the bourse’s market capitalization fell to Ksh2 trillion ($16.39 billion) during the period under review, from Ksh2.77 trillion ($22.7 billion), exacerbated by massive exits by foreign investors.
Further, CBK’s Monthly Economic Indicators Report (September) shows that foreign investor participation on the bourse has dropped from 49.92 percent to 35.92 percent.
Rising inflation, rising interest rates, a depreciating shilling, general investor apathy, a lack of new listings, poor performance of listed firms, and massive selloffs by international investors have all weighed heavily on the NSE.
Foreigners are liquidating their investments in emerging and frontier markets as a result of rising interest rates in the US and Europe, and the geopolitical tensions brought about by the ongoing war between Russia and Ukraine.
Foreign investors dumped shares worth Ksh19.54 billion ($160.16 million) in the nine months to September, citing concerns about the country’s deteriorating investment environment, according to the New York-based Morgan Stanley Capital International (MSCI). MSCI placed Kenya, along with Nigeria, Mauritius, Egypt, Sri Lanka, Brazil, and Qatar, on a watchlist of troubled markets unfit for foreign investment in the middle of this year.
