Kenyan market watch

Foreign investors at the Nairobi Securities Exchange (NSE) turned net buyers in August for the first time since January this year, with NSE data showing net foreign inflows of 1.7 billion Kenyan shillings. This positive shift indicates a renewed interest from foreign investors in the Kenyan market. Kevin Ngige, Senior Equities Analyst at Genghis Capital, shared insights on the factors driving this turnaround. Ngige explained that recent losses in the NSE, particularly in blue-chip stocks like SafariCom, created buying opportunities, attracting investors back to the market. Additionally, the release of financial results by key companies, such as banks, contributed to investor confidence. However, challenges such as low vaccination rates and government initiatives like the taxless bond have caused some uncertainty among investors. Ngige also highlighted the phenomenon of arbitrage driving interest in stocks like Bank of Kigali, which performed better at the Nairobi Stock Exchange than on its home exchange in Rwanda. He cautioned investors about retail stocks like Aberva Business Ventures, noting their limited trading volumes and lack of institutional interest. Looking ahead, Ngige predicted continued activity in blue-chip stocks and a potential shift towards government bonds as investors seek safer options. On the outlook for the NSE, Ngige expressed caution due to the impact of the pandemic on listing activities and revenue generation. Overall, while the NSE faces challenges, the positive trend in August signals a promising outlook for the Kenyan market.