- Nairobi Securities Exchange (NSE) saw record withdrawal by foreign investors at Sh29.01 billion in 2020.
- Foreigners constitute about 70 percent of daily trading at the NSE.
COVID -19 induced economic disruptions saw many investors dump equities. Nairobi Securities Exchange (NSE) saw record withdrawal by foreign investors at Sh29.01 billion in 2020. Foreigners constitute about 70 percent of daily trading at the NSE. They turned net sellers for all the months except January, August and September as they cut exposure equities in search for shelter in fixed income assets, including government bonds.
This is in contrast to last year’s trend, when foreign investors’ returned into a net buying position of Sh1.378 billion from the previous net selling of Sh22.97 billion in 2018.
Data from AIB-AXYS Africa and Capital Markets Authority show that the selling was triggered by the discovery of the first Covid-19 infection in Kenya in mid-March, with the month seeing the highest net selling (Sh9.06 billion) compared to other months. About 84.9 percent of the cumulative net selling worth Sh24.65 billion for the year happened between March and July.At the same time, local investor sentiments were also at a low given the job losses and salary cuts and preferred precautionary savings products over riskier capital markets asset class.
Though some calm in the market was restored in August and September with net buying of Sh100 million and Sh802 million respectively foreigners return into a net selling position, pulling out Sh3.05 billion after reports of fresh surge in Covid-19 infections in the last quarter of the year. Only nine out of the 62 NSE stocks have posted gains in 2020.
