Latest data indicates that market capitalization in January 2016 stood at Sh1.926 trillion down from Sh2.049 trillion in December 2015.
Total turnover at the bourse reduced from Sh15.1 billion in December 2015 to Sh13 billion in January 2016 of which 61 percent was from foreigners activity.
The data shows that both the stock market indices (NSE 20 Share Index and NSE All Share Index) lost by over 6 percent in the period under review.
The number of equity transactions however increased by 16 percent to 26,875 up from 23,100 in December 2015.
On the bond market, the number of transactions traded reduced by 47 percent in the period under review from 343 in December 2015 to 182, with the total size of the trades however unchanged at Sh21 billion.
Pan Africa Asset Management Portfolio Manager Kevin Kiprono says if the United States Federal Reserve defers their rate hike to stimulate the economy and manage the dollar squeeze in China and other dollar indebted markets, we can see improved foreign activity on the equity market.
“The market is considered cheap at the moment trading at a Price to Earnings (P/E) of 12x which is lower than the six year historical average of 13.7x,” Kiprono explained.
On bonds section, Kiprono says the upcoming treasury bonds maturities in March 2016 of approximately Sh22 billion may present opportunity to pick up bonds at high rates when the government goes to the market to borrow.
“There are ambivalent views on the direction of rates as the government is targeting to bring down overall lending rates and at the same time borrowing to fund the fiscal and current account gaps,” he explained.
The year 2015 ended on a low tone on equities as investment options, since declining prices made up most part of the year.
During the year, the Kenya equities market performed poorly with the NSE All Share Index and NSE 20 shedding 10.6 percent and 21 percent respectively, as a result of declines in large cap stocks, while the NSE 25 lost 2.2 percent since inception during the year.