Investor wealth at the Nairobi Securities Exchange (NSE) grew by Sh445 billion in the nine months to September 2017, despite election jitters and effects of drought that hit the country in the first half of the year.
Latest official data shows that market capitalization rose to Sh2.376 trillion at the end of September from Sh1.931 trillion recorded in the beginning of the year, mainly driven by appreciation of bank stocks.
The market surge started at the end of March after a two-year bear which encouraged selling, according to analysts, but was slowed down by politics that got heated as the country approached the August 8 general elections.
The market was shaken by the September 1, Supreme Court of Kenya ruling which nullified the presidential election, where the bourse is estimated to had shed over Sh50 billions of investor wealth within ten minutes of the ruling.
NSE was forced to halt trading for about half an hour “In line with @NSEKenya trading rules.
This was after the NSE 20 Share Index performance decreased by over five per cent, according to the NSE management.
The Supreme Court has since ordered fresh presidential elections in 60 days as per the constitution, after citing irregularities in the August 8 general elections.
This political heat and prolonged drought has however not derailed overall gains at the bourse as traded turnover for the nine months to September rose 11.7 per cent, above the same period in 2016 to stand at Sh135.6 billion.
This is partly pegged on increased participation of local investors returning after missing out the two-year bear run.
The benchmark NSE 20 share index gained 17 per cent in the nine months, ending September at 3,732 points.
NSE data shows that telecommunication firm Safaricom’s stock added Sh246.4 billion in market capitalization to stand at Sh981.6 billion.
The telecom’s operator’s share price rose to Sh24.50 from Sh18.35, backed by an investor rush to secure a dividend payout of Sh0.97 a share before books closed mid-last month.
The stock, one of the few that defied the 2015 and 2016 bear run, touched an all-time high of Sh27.25 at the end of August, making it the only NSE-listed firm to have crossed the Sh1 trillion mark in market valuation.
Equity and KCB , Kenya’s two largest lenders by market capitalisation, added Sh57.5 billion and Sh54.4 billion to stand at Sh146.2 billion and Sh125.7 billion respectively.
Cooperative Bank’s market value rose Sh33.1 billion to Sh100 billion.
Standard Chartered bank went up Sh22.7 billion to Sh79.4 billion, I&M Bank added Sh21 billion to its market valuation to reach Sh53.7 billion while DTB was up Sh20.9 billion to Sh51.7 billion.
Although banks generally reported lower profits in the first half of the year compared to 2016, analysts say the impact of interest rate caps that came into effect in September 2016 was softer than expected, setting the stage for share price recovery.
By Martin Mwita