The Nairobi bourse defied the rising political risk to add another Sh21 billion in investor wealth on Thursday, backed by foreign investors buying blue chip stocks.
Market capitalisation— the measure of investor wealth— rose to Sh2.361 trillion from Sh2.339 trillion on Wednesday, when the market had gained Sh15.97 billion on a day when protests ground business activity in the city to a halt.
Foreign investors made net purchases of Sh51.7 million on Thursday, reversing Wednesday’s net sales of Sh35 million.
The inflows were mainly on the Safaricom stock, which saw the telco’s share price go up by 1.7 percent to Sh24.55, translating to a market cap increase of Sh16 billion to Sh983.6 billion.
Equity Group and KCB Group, the two largest listed banks by market capitalisation, also contributed to the market’s positive movement as their shares appreciated by 1.6 percent and 1.9 percent respectively to close the day at Sh47.85 and Sh45.30.
The market valuation of Equity thus rose by Sh2.83 billion to Sh177.7 billion, and that of KCB by Sh2.73 billion to Sh142.8 billion.
The two banks, Safaricom and EABL make up the big four of the NSE in terms of valuation, combining for a market cap of Sh1.46 trillion or 61.7 percent of the NSE’s total valuation of Sh2.46 trillion.
Traded turnover also rose to Sh465 million from Sh232.7 million on Wednesday, as the number of trade deals went up from 1,566 to 2,058.
The continued gains by the Nairobi Securities Exchange (NSE) despite the civil unrest have been in contrast to last year’s June 25 protest, when it shed Sh15.6 billion in market cap and followed up with another loss of Sh11.8 billion on June 26.
Analysts say however that investors, particularly foreigners, will be looking keenly at the government’s response to the new protests to judge whether the political risk will persist.
Business activity and transport in at least 27 counties were affected as protestors took to the streets to mark the first anniversary of last year’s demos against the Finance Bill 2024.
Several outlets in various urban centres were subjected to looting by criminal elements in the aftermath of the protests, hitting their respective owners with losses running into millions of shillings.
The Kenya Private Sector Alliance had previously said the private sector loses an average of Sh3 billion daily, when there are mass demonstrations, with the government also forced to spend additional funds to replace damaged infrastructure.
