Wednesday, April 3, 2024 – The Nairobi Security Exchange (NSE) may be collapsing as we speak.
This is after it emerged that
foreign investors have sold off equities worth KSh2.3 billion, demonstrating
their continued exodus from NSE.
This pattern points to a lack of
trust in the Kenyan market, although local equities have been showing a gradual performance improvement.
According to reports, foreign
investors' portfolio flows were negative for the first three months of 2024,
with the largest selloff, at KSh1.2 billion, occurring in March.
Investors withdrew KSh106
million and KSh1 billion from the market in January and February, respectively.
Reports intimated that the
ongoing exodus of foreign investors has been associated with a discrepancy in
returns, whereby investments made in developed economies provide higher returns
than those made in emerging and frontier economies such as Kenya due to significant interest rate hikes.
Speaking during an interview,
lead financial analyst Rufas Kamau highlighted rising energy costs and taxation
as reasons why foreign businesses were closing their doors.
He noted that multinational
corporations left the Kenyan market due to low consumer demand, high borrowing
rates, and high fuel costs.
"The super-rich people find
comfort in a country with a stable taxation policy, a stable currency, and a
growing economy," Kamau said.
The Kenyan DAILY POST
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