Trading at the Nairobi Securities Exchange (NSE) is on an upward trend as share prices gain, pushing up key indices of the market.

ExchangeMarket capitalisation, which measures shareholders wealth, the NSE 20 Share Index and the NSE All Share Index (NASI), are on upward spiral, signalling better times for investors, according to data from the NSE.

The NSE 20 Share Index on Monday closed the day above the 4,000 points mark for the first time since the start of October as fortunes at the market went up. The index rose by about 30 points to stand at 4,021.14 after weeks of staying below the psychological 4,000 points.

Analysts have attributed the current rebound to decline in fortunes at the debt market, which has made investors troop back to the bourse.

Yields on Kenya’s Treasury bills at the debt market, led by the 91-day paper, have dropped in the last three weeks to an average of 9 percent, down from 23 percent, as Treasury cuts borrowing from the domestic market.
Market capitalisation, which measures investors’ wealth also rallied, gaining 78.4 million U.S. dollars on Monday alone to stand at 20.3 billion dollars.

In January, market capitalisation stood at 25 billion dollars, meaning that investors have lost about 5 billion dollars in the last 10 months mainly due to decline in share prices.

The decline in shareholders’ wealth was sharp in October, the month Kenya faced high lending rates due to rise in yields at the debt market. Investors lost 1.3 billion dollars as the bourse took in a beating for the twentieth straight month.

Overall, market capitalisation has lost about 20 percent this year and investors would be watching keenly to see if the index rises to its previous position as share prices surge.

The NASI, on the other hand, closed Monday at 147.63. The index had fallen to a two-year low. Monday’s gains were a continuation from last week, where the NSE 20 Share Index and the NASI went up by 1.40 percent and 2 percent, respectively.

Equity turnover during the week also closed 30 percent higher than the previous week while shareholder wealth grew by 2 percent on improved prices.

Leading in the price rally are stocks of companies in the telecommunication, banking, energy and commercial sectors. Enditem

Source: Xinhua


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