Kenya’s equities market experienced a significant decrease in trading activity during the fourth quarter of 2023, as turnover declined by 31.47 percent to KES 11.80 billion, compared to the previous quarter, according to a quarterly report released by the Capital Markets Authority (CMA) on Wednesday.
The report indicated an overall slowdown in Kenyan capital markets due to high inflation and a weakening macroeconomic environment. Equities trading volume saw a 24.93 percent drop to 812.07 million shares, down from 1.08 billion shares in the third quarter. The Nairobi Securities Exchange’s market capitalization also decreased by 3.27 percent to KES 1.44 trillion.
“On the equities market front, equity turnover for Q4.2023 stood at KES 11.80 billion, compared to KES 17.22 billion registered in Q3.2023, confirming a 31.47 percent decrease in trading activities during the quarter under review,” stated the report.
According to the CMA, bond market activity similarly declined, with secondary market turnover dropping by 29.81 percent to KES 137.74 billion. Despite this, the government’s bond issuances remained strong, accepting bids totaling KES 124.6 billion out of KES 151.88 billion worth of bids received.
The report attributed the decline in market activity to high inflation, with Kenya’s inflation rate standing at 6.6 percent in December, slightly lower than previous months but still above the central bank’s target range.
“Inflation in the fourth quarter of 2023 averaged at 6.77 percent compared to 9.39 percent recorded in the same period in 2022, a 0.61 percentage points decrease,” noted the report.
Wyckliffe Shamiah, CEO of the CMA, expressed the regulator’s commitment to facilitating market development and promoting policies and regulations that protect investors and instill consumer confidence.
The CMA report provided a mixed view on Kenya’s economic performance, noting a 5.9 percent GDP growth in the fourth quarter while also referencing an IMF forecast of slowing global and emerging markets growth in 2023-2024.
