Foreign investors made net purchases at the Nairobi Securities Exchange (NSE) in June, marking the first time in nine months that they bought more shares than they sold amid appreciation in the prices of key stocks.
The net purchases by foreign investors stood at Sh820.33 million in June, compared with Sh146.63 million net sales in the previous month, according to data compiled by AIB-AXYS, an investment bank.
The June performance marked the first net buying since September 2024 when their purchases outdid sales by Sh29 million. The Sh820.33 million net buying is the highest in a single month since May last year (Sh1.49 billion), according to the Capital Markets Authority data.
The flip back to net buying in June this year marks a shift in investor sentiment amid rising share prices, lower interest rates, and declining returns on government papers.
FOREIGN
In June alone, the NSE market capitalisation—the value of all shares trading at the bourse—rose by 14.5 percent or Sh305.85 billion to close the month at Sh2.417 trillion. The gain in June was equivalent to 64 percent of the Sh477.32 billion appreciation that the NSE posted in the half-year ended June 30.
June 13, 16, and 17 had the highest net purchases by foreign investors, with the cumulative net buying being Sh652.36 million in three trading sessions.
Safaricom, Equity, East African Breweries, KCB Group, Co-operative Bank of Kenya, and Standard Chartered Bank of Kenya, which are part of the Morgan Stanley Capital International (MSCI) frontier markets index have seen increased foreign investors' interest during the review period.
Foreign interest has also been witnessed on stocks such as HF Group, BAT Kenya, Kenya Electricity Generating Company, Kenya Re, and DTB Group which are on the MSCI Frontier Markets Small Cap Index.
MSCI is an international firm that provides investment data and analytics services to global investors. Their indices serve as a key performance indicator for investors tracking emerging markets.
Between January and June, the NSE has posted a 25 percent rise in the market valuation, making it the highest return among major investment asset classes during this period. The NSE returns beat government paper, fixed deposits, and property.
The market has defined several shocks including anti-government protests in major towns, US tariffs on its trading partners, and the escalating Middle East wars to sustain a rally despite fears that these shocks would take the shine off emerging markets.
“Considering what is happening in the bond market, it should be a good year for equities, and I think investors are alive to this, unless an unexpected event comes and throws everything off balance,” said Wesley Manambo, senior associate for research at Standard Investment Bank.
