This archive report was first published on 6 August 2020.
As the coronavirus pandemic spreads panic in global equity markets, foreign investors have continued to be net sellers at the Nairobi Securities Exchange (NSE).
On Thursday, August 6, 2020, the NSE 20 share index declined by 0.17% to close at 1,759.28, while equity turnover declined by 69.15% to KSh 208.6 Million compared to Wednesday's turnover of KSh 676.2 Million.
Despite this, foreign investors assumed a net buying position, accounting for 47.09% of total market sales and 56.08% of total market purchases.
The NSE 20 Share Index, which tracks the top 20 best performing counters on the exchange, is currently trading at a 17-year low, having lost more than 31% on a year-to-date basis.
Dealers and investment bankers have indicated increased activity at the bourse by foreign investors, who are exiting the market in a panic.
“Foreign investors have been net sellers at the NSE for a couple of days now as they seek for safer havens, to hedge against uncertainties brought about by global coronavirus pandemic,” said Felix Ochieng, a dealer at Faida Investment Bank.
The price of gold has been on the up, with the spot price for gold racing to a high of $2,069 per ounce on Thursday, and is now up by about +35% since the start of 2020.
Analysts attribute the rise in the price of gold to the effects of lockdowns and supply chain disruptions, making it a recession hedge at the moment.
