How Kenyan stock market defied politics in 2017

Nairobi. The Nairobi Securities Exchange (NSE) All Share Index, which measures the performance of all the listed stocks, gained 27.2 per cent this year while the NSE 20-Share Index, which tracks blue chip firms, is up 16.5 per cent.

In comparison, government securities and offshore investments have offered lower returns, as has real estate which was hard hit by the prolonged political uncertainty preceding and after the annulled August 8 General Election.

Investor wealth at the bourse as measured by market capitalisation went up by Sh567.2 billion from January 1 to close at Sh2.498 trillion on Wednesday, bringing to an end a two-year bear run that had eroded market value by Sh745 billion between March 2015 and March this year.

“The stock market performance during the year was driven by recovery in the banking sector in anticipation of an amendment of the interest capping law (after elections) and positive investor sentiment on Safaricom SCOM • 27.00 to 2.86%,” said Neha Datta, investment consultant and risk manager at Zamara, formerly Alexander Forbes East Africa.

The revival of the market is a big boost for pension funds and insurance firms, which are among the biggest investors in equities.

Safaricom’s share price jump to Sh26.25 means shareholders have booked a capital gain of 29 per cent since January, when the telecoms operator was trading at Sh19.15 a share. Their paper wealth has grown by Sh284.5 billion.

Among the 11 listed banks, nine have recorded double-digit percentage gains in share price in 2017, led by DTB DTK • 192 at 59 per cent. KCB KCB • 43.00 to 0.58% and Equity EQTY • 40.00 to 3.23% are up 42 per cent and 33 per cent respectively. In the fixed income segment, the one-year Treasury bill has averaged a yield of 10.94 per cent this year, while the six-month paper has offered an average of 10.42 per cent. (NMG)