The NSE Lost 11.2 Billion Shillings In 3 Months Due To Covid-19

The Nairobi Securities Exchange (NSE) lost a whopping 11.2 billion shillings due to panic selling from foreign investors between the month of January and March.

Foreign investors were thrown into a panic mode and started mass selling of their wealth at the NSE as the news about the spread of Covid-19 started to hit the markets.

Data from Capital Markets Authority (CMA) indicate that between the month of January and March, foreign investor participation at the NSE culminating into net portfolio outflows in comparison to 601 million shillings in inflows across similar period in 2019.

Stock markets across the world were hard hit by the advent of Covid-19, with some, for the first time in history, having investors trade remotely from their homes.

In Kenya, the NSE has remained under the mercy of Covid-19, with the equities market being the most hit. Foreign investors in blue chip companies have been taking off, selling off the shares to protect their wealth.

“The quarter under review was overshadowed by global socio-economic shocks triggered by the Covid-19 pandemic,” said CMA in a statement.

Kenyan markets were no exception to Covid-19. The first confirmed case of Coronavirus in the country led to lose by 5 percent, leading to a halt in trading as investors were thrown into panic, selling off their shares.

NASI and NSE 20, during the three-month period, lost 20.7 and 23.7 percent respectively, closing the quarter at 131.92 and 1966.12 points each.

Market capitalisation at the NSE lost 7.9 percent from 2.2 trillion shillings to 2.016 trillion shillings. The equities market turnover, on the other hand, lost 2.9 percent.

The top 10 firms at the NSE were the most hit with the market capitalisation contraction. Market capitalisation for the top 10 firms dropped from 2.5 trillion shillings to 2.0 trillion shillings.

Safaricom, one of the giants at the NSE lost 8.3 percent in market capitalisation from 1.2 trillion shillings to 1.1 trillion shillings.

CMA is, however, confident that with the local investors’ continuous support, the NSE is likely to pull through.