NSE listing fees drop to 6 year low as firms exit

As the Kenyan government announced a phased reopening of the country from COVID-19 lockdowns to stimulate the economy, the shilling dipped against the dollar while the Nairobi Securities Exchange lost $1.02 billion. Speaking with investment analyst Felix Otieno, CNBC Africa discussed the developments in the Kenyan money market and beyond. Despite the reopening, investors remained cautious, unsure of how it would impact the money market. This uncertainty led to a hesitancy among investors, with some still holding back. Over the last three months, the Nairobi Exchange has seen a decline in the value of stocks, with companies like Tafari Konok, Seen Casey Lee, and Equity experiencing losses of at least 20% year-to-date. This poor performance can be attributed to global economic trends. With activity on the NSE concentrated on a few counters, particularly Safari Com, there is a risk with such heavy reliance on one company. Otieno highlighted the importance of diversifying the market to attract more investors. The recent tax bill introducing taxation on brokerages has raised concerns, as it may deter investors from the stock market. The drop in bond turnover at the NSC by 21% in the first half of 2020 is linked to investors seeking safer havens in more developed markets amid the pandemic. Inflation in Kenya rose to 4.59% in June, driven by food prices, while the Kenyan Shilling remained weak against the US dollar due to high demand for the greenback. Additionally, fuel prices recorded the largest increase in over 13 years, attributed to rising global prices and taxation introduced by the government. The government's price controls for fuel have not mitigated these increases effectively. Amid the lockdown, Kenyans have imported around 45 billion Kenyan Shillings in dollars, putting pressure on the local currency and contributing to its weakening.