CMA Formulates Margin Trading Regulations For The Bourse Inbox

The market concluded the session on a negative note, evident in the performance of benchmark indices. Both NASI and the NSE 25 experienced a 0.3 percent decline, while the N10 and the NSE 20 saw drops of 0.4 and 0.7 percent, respectively.

Simultaneously, equity turnover showed an uptick, reaching USD 1.6 million, marking a significant increase of 171.4 percent. Foreign investors played a dominant role, contributing to 83.7 percent of market activity, a substantial rise from the prior session’s 12.3 percent participation.

Equity Group took the spotlight, driving 37.6 percent of the day’s activities. The stock continued its bullish trend for the fifth consecutive session, recording a 1.1 percent gain and reaching a seven-week high at KES 37.50.

Safaricom followed closely, accounting for 25.5 percent of the day’s activity. Despite a seven-session price slide, its price stabilized at KES 13.10. On the flip side, EABL emerged as the worst-performing top mover, hitting an all-time low at KES 100.00, reflecting a 4.3 percent drop from the previous close.

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KCB Group and StanChart experienced declines of 1.7 and 0.2 percent, settling at KES 20.05 and KES 160.00, respectively. Meanwhile, Stanbic remained unchanged at KES 110.00.

TransCentury emerged as the top gainer, rallying by 6.4 percent to KES 0.50, while Flame Tree lagged behind with a 9.7 percent decline, closing at KES 1.02.

Foreign investors continued as net sellers, with net outflows totaling USD 81.7K. Stanbic led the selling charge, while Safaricom led in buying activities.

In the regulatory landscape, CMA is in the process of developing margin trading regulations to breathe new life into share trading on the NSE. This initiative will empower investors to leverage their positions by borrowing funds from brokerage houses, potentially amplifying both gains and losses. Although Kenya has already enabled day trading, securities lending, borrowings, and derivatives, the absence of market makers has limited overall activity. The anticipated implementation of margin trading is seen as a crucial milestone that is expected to drive increased turnover levels and enhance overall market liquidity.

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