Kenya Equities Market Bull Run – July 2017  Update 

The Kenya equities markets is on a bounce back and one may say a moderate bull run.

Since late March 2017, equity indices have exhibited an upward trajectory moderately reversing losses incurred in the hard hitting year of 2016. 

So far, the NSE 20 share index and NASI have gained 18.27% and 18.76% year to date, respectively. 

To note, the NASI seems to be outshining the NSE 20 share index perhaps highlighting the difficulties being faced by some blue chip companies in light of a changing regulatory environment, slow down in business activity and slow down in lending to the private sector.

Notably, foreign investors are turning net sellers in the equities market perhaps in light of the uncertainty surrounding the outcome of the August 8th general elections.

Election polls currently suggest a tight presidential race with a greater likelihood of a run off. 

In fact, foreign investor participation dropped from a 7 year monthly peak of 83% in September 2016 to 58% in June 2017. However, demand from local investors has helped support the upward trend in the equities market. 

With the upward move in yields in the bond market limited by the interest rate capping law that was introduced last year in September 2016, the equities market offers investors a silver lining at the (still) relatively low valuations.

Also, a good bet would be that after the general election, with more certainty in place, foreign investors will come back to the equities market turning stock market valuations even higher.

Happy investing!

AR 

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