Resurgent NSE large caps beat other African markets

The index of the Nairobi Securities Exchange (NSE)’s 15 largest counters by market capitalisation offered investors the best returns among African bourses in May, outperforming alternative investments such as fixed income in the period.

Market data compiled by African Alliance shows that the FTSE NSE Kenya 15 Index had a return of 13.4 per cent in May, standing at 183.7 points.

This is ahead of the Nigeria Stock Exchange’s return of 12.8 per cent, Zimbabwe’s 11.9 per cent and 6.3 per cent for the Egypt EGX 30 index.

Analysts say that investor sentiment in the market is shifting, especially among local retail traders, with the new demand boosting the shares of blue chip stocks such as Safaricom, Equity, KCB, EABL, Co-operative Bank and Nation Media Group.

“There has been a shift in investor sentiment since the beginning of the year from one of caution, to one of cautious optimism. With the macroeconomic variables that impact the performance of companies listed on the NSE expected to be positive; outlook on the performance of the market going forward is positive,” said Britam asset managers in their May equities review.

“Investors who have adopted a wait and see stance are looking forward to the outcome of the August 2017 general election as a significant indicator of the direction the market will head in.”

The FTSE NSE Kenya 15 Index tracks the performance of the largest 15 stocks ranked by full market capitalisation while the FTSE NSE Kenya 25 Index tracks the performance of the 25 most liquid stocks.

International investors normally pick their portfolios based on the FTSE NSE indices.

Other East African markets are not faring as well as the NSE. Tanzania’s Dar es Salaam exchange has a return of -4.7 per cent in May, Uganda’s exchange 6.4 per cent and Rwanda’s stock exchange -3.4 per cent.

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