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Shareholders’ wealth at NSE dips by 6.6pc to Sh2.5trillion in Q4 2021

NAIROBI, Kenya Jan 21-Shareholders’ wealth at the Nairobi Securities Exchange dropped by Sh185.73billion in the fourth quarter of 2021, as the markets still suffered from economic effects of Covid-19, the latest CMA statistical bulletin has revealed.

The Capital Market Authority’s Q4 statistical bulletin shows that market capitalization at the Nairobi bourse dropped to Sh2.592 trillion in the period compared to Sh2.778 trillion in the third quarter of 2021, a 6.6 percent drop.

Nonetheless, on a year-on-year basis, investor wealth grew by 10.97 percent from Sh2.336 trillion in December 2020 to Sh2.592trillion in December 2021.

“The Authority remains confident that collaboration among the capital markets stakeholders will strengthen the industry’s ability to weather any current or future uncertainties,” said Wyckliffe Shamiah, CEO Capital Markets Authority.

Further, the CMA bulletin noted that equity market turnover has been steady in the last 6 months of 2021 increasing to Sh36.31billion in the quarter ended December 2021 compared to Sh31.36billion in the quarter ended September 2021.

Year on year performance showed that in 2021, equity turnover decreased by 7.58 percent at Sh137.41billion compared to Sh148.68billion recorded in 2020.

“Similar to what was observed in 2020, the Kenyan bond market in 2021 had more activity than the equities market,” said CMA.

The bond market in 2021 had a turnover of Sh956.97 billion compared to KShs.691.83 billion in 2020, representing a 38.33 percent increase.

CMA attributed the significant change to attractive infrastructure bonds issued during the year that spurred investor participation owing to their good returns and tax-free nature.

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For instance, the September 2021, Infrastructure bond issue seeking to raise Sh75billion recorded a performance rate of 201.67 percent after bids worth Sh151.26billion were submitted.

Quarter to quarter comparison shows that the bond turnover decreased by 38.47 percent from Sh301.09 billion in September 2021 to Sh185.26billion in December 2021.

In the corporate bond market, the Authority has observed enhanced confidence as evidenced recently with the oversubscription of 345 percent reported for the East African Breweries Plc (EABL) medium-term notes.

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