NSE Performs better than other African Money Markets

The Kenyan bourse has outperformed key competitors Nigeria and Egypt in 2015 according to data on the state of African stock exchanges.

The Nairobi Securities Exchange (NSE) all share index reduced by 10.6 percent in value in 2015, Nigeria Stock Exchange All share was reduced by 21.3 percent while Egypt recorded a decline of 29 percent.

Morocco and Tunisia recorded lower declines than the Nairobi Security Exchange, while Zimbabwe was the worst performing, reducing by 30 per cent.

There is a competition between the Kenya Stock Market and the other African markets especially for the dollar from the investors. Most African countries depend on the dollar for the thriving of key development sectors.

Since the month of March last year, the Nairobi Security Exchange has been faced with some economic challenges something that have seen the decline in investor wealth by 251 billion for the year.

Due to these challenges in the recent past, the NSE 20 share index has performed significantly worse than all the share index that has dropped by 21.9 percent during the year 2015.

According to economic analysts, the African markets in general are now competing for a smaller field of foreign dollars from investors. This is because the investors are now more than ever shifting their investment dollars to a cheaper and less risky market such as the US.

Early last month, the US Federal Reserve raised its base rate by 0.25 percentage points attracting higher returns from the US market for investors.

Another rise in the rate is widely expected to come in March and is likely to keep pushing capital back to the US markets at the expense of African markets.

This year, most economic analysts are trading with caution on the prospects of the market reviving, especially due to the lower earnings by listed firms that have dampened investor sentiments.

Article by Juma Fred.