by Bedah Mengo

The shares were going for 0.11 U.S. dollars each and Mogina bought more than 2,700 of them, spending 294 dollars.


Two years later, the government worker again bought shares of another company when it floated its shares in an IPO at the Nairobi Securities Exchange (NSE).

Upbeat, the supplies and purchases officer spent another 392 dollars on the shares sold at 0.05 dollars each.
Years later, Mogina is still holding onto the shares of the companies, but their value has deteriorated by so much that if he sells now, he will make huge losses.

“I wish I had sold my shares years ago when their prices had hit the peak. Right now I cannot sell because prices are down by over 50 percent. I once thought the stock market was the best place to invest but it is no more,” he said Thursday.

His views are shared by thousands of other citizens in the East African country, many of whom have seen their wealth at the bourse depreciate after investing in shares for the first time.

The fall of fortunes at the market has hit hard big investors as much as the small ones like Mogina.

While the big investors may have other investments that may cushion them from the losses, the market’s losing streak has dampened the spirit of small investors, many of whome have completely shunned it as they pray hard for prices to go up.

“It is just like I took my money and dumped it in an open field, and the wind has been blowing it away, one dollar at a time. I cannot buy shares again,” said George Kimani who has seen the 980 dollars he invested fall to 196 dollars after four years.

When buying the shares, Kimani had no immediate plan to offload them as one day he thought he would sell and pay for his children’s school fees.

“I bought when my two children were three and five years respectively, and only one had started school. Right now they are in mid primary but I cannot sell the shares and pay their fees. I have to take a bank loan,” he lamented.

The East African nation’s securities’ market has experienced turbulence for over one year now leading to decline of key indices and the market capitalization, which measures shareholders’ wealth.

On Wednesday, market capitalization stood at 18.8 billion dollars, a lowest level in three years. The key index in January stood at 25 billion dollars.

This means in the last 10 months, investors’ wealth has depreciated by about 7 billion dollars.

The decline in shareholders’ wealth has been sharp in October, the month Kenya was facing high lending rates. Investors lost 1.3 billion dollars as the bourse took in a beating for the 20th straight month.

Similarly, the NSE All Share index, which measures the performance of all listed shares, stood at 4,002.96 Wednesday, a two-year low while the NSE 20 share index closed the day at 3,830.15, a 30-month low.

Analysts blame the historical decline to flight of foreign investors to other better performing markets in Africa, particularly South Africa and Egypt, and lately, the high yields at the debt market, where interest rates on government T-bills and bonds hit 23 percent.

They say it will take years before the small investor returns to the bourse. All that had been done to introduce people to the stock market has been eroded by the decline. Enditem

Source: Xinhua


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