NSE June trading review

The Nairobi Securities Exchange (NSE) saw an interesting trend in June, with 10 companies accounting for nearly 95% of the total turnover. This concentration of turnover is raising concerns among market analysts and investors alike. To delve deeper into this phenomenon, CNBC Africa spoke with Eric Mokaya, the founder of Mwango Capital, to get his insights on the NSE's performance. Mokaya highlighted that the top five companies alone were responsible for around 82 to 84% of the turnover in the previous month. This trend of concentration has been consistent, with these companies also driving the index's performance over the past few months. Companies such as Safaricom, Equity Group, NCBL, EBL, and KCB have been the key players in propelling the NSE index upward. Mokaya emphasized that owning shares in these top companies is crucial for investors to perform well in the market. He suggested that the NSE needs more companies to enter the market through IPOs or garner more attention to diversify the index. Safaricom, in particular, has been a significant driver of market movement, with a staggering 41% increase in its share price recently. The company's venture into Ethiopia has been a major catalyst for investor interest. The announcement of winning the bid in Ethiopia and the strategic moves Safaricom is making in the new market have played a pivotal role in boosting investor confidence. Additionally, Safaricom's commitment to maintaining dividends amid its expansion into Ethiopia has reassured investors seeking stable income. The appointment of a seasoned executive with expertise in payments for Safaricom's Ethiopian venture further signals the company's strategic focus on the mobile money market in Ethiopia. With a large market potential in Ethiopia, especially in the telecom sector, Safaricom is poised to capitalize on this opportunity. As Safaricom gears up for its Annual General Meeting (AGM) later this month, investors are eagerly awaiting insights into the company's Ethiopia strategy. The AGM resolutions will shed light on Safaricom's subsidiary setups and expansion plans. Market analysts anticipate significant discussions around Safaricom's competitive strategy in the Ethiopian market and its potential for growth. Apart from Safaricom, investors are also closely monitoring companies like Centum and Nairobi Business Ventures. Centum, set to report earnings later this month, is expected to provide insights into its performance and future prospects. Meanwhile, Nairobi Business Ventures has seen a sharp increase in its share price, driven by its acquisitions and expansion plans, including a cement factory and airport-related ventures. However, skepticism looms over the sustainability of Nairobi Business Ventures' rapid share price surge, with some market analysts questioning the underlying fundamentals driving the stock. While some investors remain optimistic about the company's growth potential, others are cautious about the pace of its upward trajectory. In conclusion, the NSE's performance in June showcased a concentration of turnover among a few key companies, with Safaricom leading the market movement. As the market awaits further developments, particularly around Safaricom's Ethiopia venture and upcoming AGM, investors are advised to carefully evaluate their investment strategies in the dynamic NSE environment.