Business
Kenya’s Nairobi Securities Exchange in 2nd best performer in Africa & Middle East
Traders on the floor of the Nairobi Securities Exchange
Annual market performance statistics released by the Nairobi Securities Exchange indicate that the benchmark the Nairobi Securities Exchange (NSE) 20 Share Index — a key indicator of the market performance, rose by 28.95 percent to close at 4,133.02 points.
The index closed at 3,205.02 points at the end 0f 2011. The gain places the Nairobi Securities Exchange as the second highest gainer among the stock exchanges in Africa and Middle East, after the Egyptian Stock Exchange, and eighth globally.
The All Share Index was even higher at 39.41 percent but it is yet to gain market acceptance as a representative of the market performance, largely due to the short period it has been in the market compared with the NSE 20 Share Index.
Market valuation
In terms of market valuation, the stock market closed the year at KSh1.27 trillion (US$ 14.7 billion) against Sh868 billion (US$ 10.06 billion) posted at the close of year 2011.
Growth in investor confidence has defied past trends where an election period is characterized by capital flight as investors move their money to other countries owing to fear of political uncertainty. Low inflation, falling interest rates and stable currency, compared with last year, has also played a key role in price rally.
From a high of 18.93 percent in December 2011, inflation has for 13 consecutive months fallen to 3.2 percent in December last year.
The Kenya shilling closed the year at an average rate of KSh84.6 against the US dollar during the same period, from a low of KSh107 in 2011, with interest rates falling to average 18 percent from highs of over 24 percent.
Confidence that the economy will outperform 2011 and better the pace in 2013 also played a key role as this is an indication that companies will benefit from the improved economic conditions.
Uchumi Supermarket shareholders were the biggest beneficiaries of the price rally, closing the year more than double the opening price at KSh19.10 (US$ 0.22), up 148 percent.
The retail chain’s shares were relisted mid last year after a successful turnaround after the collapse of the firm in 2005.
Good financial results and expected regional expansion were key drivers.
And despite facing increased regulation, tobacco manufacturer British American Tobacco (BAT) doubled its share price on account of increased export business.
Pan Africa Insurance and the Kenya Commercial Bank closed the top five gainers list.
In all, a total of 36 out of 61 listed companies returned positive gains on their share price while 18 dropped.
Kenya Airways and East Africa Portland Cement were the top losers on account of poor financial results, wrangles with employees and, for Portland, boardroom wars.
Source: Daily Nation