Foreigners remain NSE net sellers for 8 straight months

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Nairobi Securities Exchange (NSE) on the trading floor of the Exchange building. 

Photo credit: File | Nation Media Group

Foreigners remain net sellers of Nairobi Securities Exchange (NSE) listed stocks for eight straight-months to the end of May on prolonged uncertainties regarding US trade policy.

Data compiled from local stockbrokers shows the net sales by the foreigners hit Sh6.95 billion in the review period, with the largest outflow coming in December and February at Sh1.28 billion each.

Foreign outflows in May were lower at Sh146 million compared to exits totalling Sh850.8 million a month earlier.

Analysts attribute the exits to the prolonged uncertainty regarding the global growth picture as the US continues to explore tariffs to correct its trade imbalances with other countries.

“We believe that the outflows are about uncertainties as US President Donald Trump flip-flops around policy resulting in no confidence among investors in sticking to emerging and frontier economies,” said Teddy Irungu, a research analyst at stock brokerage AIB-AXYS Africa.

“We are now seeing new tariffs on specific products such as aluminium and steel. Investors are adopting a wait-and-see approach before committing to positions in emerging and frontier markets.”

Foreigners have largely avoided the local bourse despite the market turning around last year to deliver a mean 34 percent return in Kenya shilling terms and a 65.3 percent dollarised return.

The foreign investors scaled down their participation in the equity market with their activity accounting for 38.24 percent of the total market turnover in the first three months of the year to March from 43.83 percent in the quarter to December.

On April 2, 2025, President Donald Trump unveiled new tariffs on almost all countries in what he dubbed as ‘Liberation Day’ where Kenya was also on the end of a 10 percent reciprocal tariff.

The US has since flip-flopped on its policy, first suspending higher tariffs for countries by up to three months even as it engages in retaliatory tariffs with partners such as China who matched Trump’s tariff increase in the aftermath of the announcement.

The Capital Markets Authority (CMA) attributed the dip in foreign investor activity in the first quarter to the expected US pronouncement on tariffs.

“The drop is attributed to investors seeking a secure investment environment that is unlikely to be significantly affected by the proposed policy reforms in the US,” CMA said.

“In January, foreign participation remained relatively strong at 46.22 percent. However, foreign participation dropped sharply to 31.03 percent in March, likely due to tariff pronouncements by the US. These tariffs may have triggered concerns over potential trade wars, leading investors to seek safer havens away from the frontier and emerging markets which are likely to be the most affected by these tariffs.”

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