Improved activity was noted in the Nairobi Securities Exchange during the first quarter of 2024, with market capitalization rising to KES 1.8 trillion due to increased investor confidence, buoyed by the stabilization of the Kenyan Shilling. After experiencing a decline last year, the Shilling rebounded, settling at an average of KES 133, compared to its low of KES 164 in January.
This positive currency performance had a ripple effect on equity markets, resulting in around 55% increase in the equity market return for the period January to March.
Trading volume also surged by 27.04%, with shares traded reaching 1.1 billion from 780.2 million. The market capitalization at the end of the first quarter rose to Kes 1.76 trillion from KES 1.43 trillion, reflecting the increased value of outstanding shares.
Despite a slight net equity portfolio outflow of KES 2.23 billion, down from KES 2.34 billion in the previous quarter, investor confidence remained strong, spurred by favourable market conditions and reduced outflows influenced by higher returns in foreign markets, particularly the US.
Foreign participation in the equity market slightly increased to 60.31%, attracting global institutional investors. Moreover, the concentration of market turnover in the five major bluechip companies declined, indicating investors’ willingness to diversify their portfolios.
The Nairobi Securities Exchange recorded a remarkable 57.14% increase in US dollar terms, according to the Morgan Stanley Capital International index (MSCI). Market volatility remained low across three key indices, and liquidity increased due to investor activity during the dividend declaration season. Kenya’s successful issuance of a USD 1.5 billion Eurobond further boosted confidence in the capital markets, attracting foreign investors back to the Nairobi Bourse and supporting efforts to deepen and enhance market performance.
