Investor wealth on the Nairobi Securities Exchange (NSE) fell by Sh124.4 billion over the three days to Wednesday as the import tariffs announced by US President Donald Trump continued to affect global markets.
In yesterday’s trading, the NSE’s market capitalisation—the aggregate valuation of all listed stocks— retreated by Sh51.55 billion to Sh1.942 trillion, eclipsing Monday’s Sh37.4 billion fall as the biggest single-day decline in the last one year. The market also shed Sh35.4 billion in valuation on Tuesday.
Share prices of key stocks continued their downward trend yesterday on selling pressure from local investors, who accounted for 60.7 percent of the day’s traded turnover of Sh377.2 million.
Safaricom, Equity Group, and KCB Group have collectively shed Sh87.56 billion in market capitalisation over the three days, accounting for 70.4 percent of the market’s total valuation decline.
The telco, which is the largest listed firm on the bourse, has seen its share price decline by 7.5 percent or Sh1.40 to Sh17.25, resulting in a market cap fall of Sh56.1 billion to Sh691.1 billion.
Equity Group’s share price has come down by 9.7 percent or Sh4.55 to Sh42.55, cutting its market cap by Sh17.2 billion to Sh160.6 billion, while KCB’s 11.2 percent or Sh4.45 share price fall to Sh35.30 has slashed Sh14.3 billion from its valuation to Sh113.4 billion.
Four other companies have seen their valuations fall by between Sh4 billion and Sh6 billion, led by Absa Bank Kenya whose market cap has retreated by Sh5.9 billion on the back of a 6.1 percent decline in share price to Sh17.
The others are Co-operative Bank (Sh4.7 billion), EABL (Sh4.5 billion) and NCBA at Sh4.1 billion.
These blue chips are among the most liquid stocks at the NSE, making them the favourites of foreign and institutional investors. They are also among the most consistent in dividend payments, a key consideration of such investors.
The higher exposure to savvy investors has made them more likely to be affected by external or global market fundamentals, such as the tariff-led selloff seen this week.
Global markets, which had shown signs of recovery on Tuesday, turned largely negative yesterday as the higher tariffs announced by Mr Trump last week took effect in the 60 countries where the rate was set above the baseline of 10 percent.
Under the US plan, the baseline 10 percent tariff took effect on April 5, while those facing higher levies saw theirs kick in yesterday. Kenya was placed in the 10 percent tariff group.
In Asia, the US has imposed tariffs of between 24 and 49 percent on countries such as Japan, India, Bangladesh, and Vietnam, but reserved its biggest levy for China at 104 percent.
Beijing responded by increasing its levy on US imports from 34 percent to 84 percent, setting the world’s two largest economies on a path to a trade war.
Japan’s Nikkei 225 Index fell by 3.9 percent yesterday, while Hong Kong’s Hang Seng index was down 0.4 percent. Stocks in Australia and South Korea fell by 1.8 percent.
In Europe, London’s FTSE 100 Index, Germany’s Dax, and France’s Cac 40 were all down by more than three percent in afternoon trading. The European Commission voted to impose a retaliatory 25 percent tariff on selected US products including soybeans, motorcycles, orange juice, steel, and aluminum.
