This archive report was first published on 8 August 2019.
On August 6, 2019, the Nairobi Securities Exchange (NSE) main index hit a 10-year low, with the NSE-20 Share Index closing at 2,552.19 points, down from 2,575.73 a day earlier.
According to analysts, the decline was caused by foreign investor outflows and profit-taking on banking stocks, amidst turmoil in global markets.
“I would attribute it to a general market issue whereby we have had foreign investor outflows. There have been net foreign investor outflows, while local participation has reduced,” said Sarah Wanga, head of research at AIB Capital.
Wanga noted that the decline had been gradual, starting around October, and was also influenced by the performance of specific sectors, including insurance companies and manufacturing, particularly construction.
Data from the Capital Markets Authority showed that in the second quarter of 2019, foreign investors accounted for an average 69.62 per cent of the market turnover, down from 76.96 per cent in the previous quarter and 70.80 per cent in the second quarter of 2018.
As of August 6, 2019, the NSE-20 Share Index was at its lowest level since March 12, 2009, when it closed at 2,453.36.
