NSE market capitalization drops to Ksh1.75 trillion

By Elijah Odhiambo

The Nairobi Securities Exchange (NSE) lost Ksh229 billion in investor capital in the three months ending March 31 2023, citing the loss to investors looking for safer investments options in other markets after an unfavorable run at the exchange.

The NSE market capitalization decreased by 11.57 percent in the first quarter of 2023, from Ksh1.98 trillion in Q4 2022 to Ksh1.75 trillion, according to the Capital Markets Authority’s (CMA) Q1 2023 Statistical Bulletin.

The decline saw the NSE 20 Share and NSE All Share Indices dropping by 3.22 and 11.54 percent, respectively, ending the quarter at 1,622.05 points and 112.76 points, respectively.

Investors at NSE

In the first three months of 2023, the bulletin showed that the number of local individual investors dropped from 1,936,795 to 1,936,412 while local corporate investors dropped from 74,558 to 74,334.

Additionally, foreign individual investors dropped from 13,814 to 13,799 while foreign corporate investors dropped to 1,008 to 1,063.

In the quarter, average foreign investors participation was 41.24 percent compared to 54.84 percent recorded in Q4.2022, implying a 13.60 percent decrease.

This saw net foreign portfolio outflows surge to Kah13.93 billion as compared to an outflow of Ksh4.87 billion in Q4.2022.

Equity Turnovers

Despite the drop in capitalization, equity turnover for the first quarter of 2023 was Ksh44.82 billion, up 156.71 percent from the Ksh17.46 billion recorded in the first quarter of 2012.

In the equities market, there were 1.08 billion shares traded in Q1.2023 compared to 634.17 million shares in Q4.2022, a rise of 71.33 percent.

In addition, the volume traded increased by 44.25 percent year over year from 753.20 million exchanged in Q1 2022.

In terms of turnover, the derivative market had a fall, ending the quarter at 20.63 million from 22.00 million in Q4 2022, a 6.23 percent drop.

Additionally, the number of transactions during the reviewed quarter fell by 17.48 percent from 309 transactions in Q4 to 255 transactions in Q1.

Government support

The CEO of Capital Markets Authority, Wycliffe Shamiah while releasing the bulletin revealed that despite the reduced economic growth and high inflation, the government has made efforts to boost investor risk appetite.

“The first quarter of the year has seen a mix of positive and negative trends, particularly in the bond, equity, derivative, and collective investment schemes markets. Despite the downturn in economic growth and high inflation, the government’s efforts to stabilize public finances and boost investor risk appetite have instilled confidence in the market,” said Wycliffe Shamiah.

Q4, 2022 Report

The Nairobi Securities Exchange(NSE) lost Ksh610 billion in investor wealth in the quarter ended December 2022.

According to the Capital Markets Authority (CMA) Q4 Statistical bulletin, NSE market capitalization stood at Ksh1.96 trillion as at December 2022, a 23.40 percent decrease from Ksh2.59 trillion in December 2021.

During the period, the top five stocks at the NSE either recorded a drop in capitalization or slow growth, signaling their significance in the Kenyan capital markets.


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