About 80 billion shillings of investors at the Nairobi Security Exchange (NSE) are in the red as most of them have booked for paper losses in the first three quarters (nine months of the year).
According to records at the NSE, only six companies have recorded price gain. There are a total of 64 actively traded in stocks at the NSE. 49 of the stocks on the other hand have recorded double digits in percentage decline.
The most affected stocks are from the financial sector. Banks are said to have already lost close to 183 billion shillings in terms of market capitalization. Matters in the banking sector were even made worse with the signing of the Banking Amendment Bill (2016) into law that capped the interest rates at 14.5 percent.
According to Stratlink Africa, a research analytic firm, the market continues to suffer from the after-effects of investor reaction to the setting of caps on commercial banks’ lending rates with the banking sector counters sustaining a bearish trend. It goes on to say that investors at the NSE are banking on the recent dovish signal by the Central Bank of Kenya’s decision to cut the CBR by 50 basis points to 10 percent to help stir the market.
Kenya Commercial Bank, Equity Holdings, Barclays Bank and Co-operative Bank stocks are the ones that suffered the biggest losses in the market capitalization at 48.3 billion, 35 billion, 29.6 billion and 27.6 billion shillings respectively.
As the general elections nears in August 2017, economic analysts are projecting a general decline in economic activities in the country majorly due to tension among foreign investors who are uncertain of the outcome of the elections. Already some investors are reluctant on investing in new projects deciding to do that after the next General Elections.