This archive report was first published on 1 November 2021.
Foreign investors pulled out Sh1.48 billion from the Nairobi Securities Exchange (NSE) in October, marking the second straight month of net-selling amid the prevailing rise in stock prices.
According to data from trading and corporate advisory firm AIB-AXYS Africa, foreigners bought shares worth Sh6.75 billion but sold others valued at Sh8.24 billion during the review period.
Locals took up the shares being sold by foreigners, signalling that they see improved fundamentals of companies as Covid-19 restrictions ease.
"The sell-off has partly come to the benefit of locals signalling that local investors are more positive about the prospects of the market and are looking for opportunities to invest. Economic activity is picking up on relaxed Covid-19 restrictions," said AIB-AXYS Africa Head of Research Sarah Wanga.
The NSE 20 index, a price weight index calculated as a mean of the top 20 best performing counters, dropped to 1,961.33 points from 2,031.17 points it opened the month with.
Net selling was seen on the top five largest stocks by market capitalisation — Safaricom, Equity, KCB, East African Breweries and Cooperative Bank of Kenya (Co-op Bank).
Other stocks that witnessed net-selling during the month included Sanlam Kenya, Centum Investment, Standard Chartered Bank, and BAT Kenya.
Focus now shifts to banks that are expected to release their third-quarter results this month, with the earnings expected to influence the direction of the bourse.
"Most banks including Standard Chartered are currently trading at a discount and this makes them attractive. The third-quarter earnings may serve as a sweetener," said Ms Wanga.
