Prolonged elections see foreign investors turn net sellers at NSE

NAIROBI, Kenya, Nov 8 – Foreign Investors in Kenya’s stock market removed Sh10.9 billion in the third quarter of 2017  attributable to the prolonged electioneering period.

This is an 84 percent increase compared to Sh5.9 billion same period last year, Analysts at Cytonn Investments say.

According to the analysts,  political risks in Kenya still remains huge that has seen foreign investors continue to adopt a “wait-and-see” approach.

However, expectations are for long term investors to enter the market seeking to take advantage of the attractive valuations.

“Investor sentiment has been high, with foreign investors entering the market in search of attractive valuations, amid a relatively peaceful election period.Foreign investors are expected to demand higher premiums due to political risks posed by elections and economic risk due to the planned rate hikes by the US Federal Reserve,” analysts predict.

The market is currently trading at a price to earnings ratio (P/E) of 12.5x, versus a historical average of 13.4x, and a dividend yield of 4 percent, compared to a historical average of 3.7 percent.




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