Foreign Investors at NSE Turn to Net Buyers, Reverse 5-Week Selling Spree

Nairobi Securities Market’s Momentum Still Negative, Its 3rd Week

Image I Courtesy NSE

Foreign investors at the Nairobi Securities Exchange (NSE) recorded a net buying position, reversing their 5-week trend of being net sellers.

Data from Genghis Capital week ending Nov. 18, foreign investors logged net inflows of KSh 279 million compared to a net outflow of Ksh 614 million in the previous week.

As a result, they accounted for 54.6% of the week’s total activity, compared to 46.8% in the previous week.

Net buying activity was largely on Diamond Trust Bank and KCB Group while net selling activity was majorly on Safaricom, EABL and Equity Group.

During the week, the market retreated for the second subsequent week on profit-taking by investors.

The NASI, NSE-20 and NSE-25 fell 3.1%, 2.4% and 2.7%, respectively.

“The performance in NASI was driven by losses recorded by large-cap stocks, with BAT, Barclays Bank of Kenya, Co-operative Bank and Safaricom recording losses during the week of 8.3%, 6.7%, 4.5%, and 4.2%, respectively,” according to Cytonn Investment.

Turnover more than halved, posting a turnover of Ksh 2.7 billion compared to a turnover of Ksh 6.0 billion in the prior week.

Trading activity was mainly on the large caps; Safaricom, Equity Group, KCB Group, Diamond Trust Bank and EABL.

In the listed banking sector, Equity Group, KCB Group and Co-operative Bank released their Q3’2019 results,  they all recorded increases in their core earnings per share by 10.4%, 6.2% and 5.5%, respectively.

Cytonn Investment remains “Positive” on equities for investors as the sustained price declines have seen the market P/E decline to below its historical average.

“We expect increased market activity, and possibly increased inflows from foreign investors, as they take advantage of the attractive valuations, to support the positive performance.”