Nairobi — The Russian invasion on Ukraine coupled with the upcoming election jitters saw the Nairobi Securities Exchange shed off Sh117billion in the first quarter of 2022 as investors sought safer investments, a new report by the Capital Markets Authority shows.
The Capital Markets Authority(CMA) Quarter Four Soundness Report released Monday shows that investor net worth at the NSE stood at Sh2.47trillion as of March 25 compared to Sh2.59trillion in the previous quarter-end.
The report noted that during the review period, on February 24 following Russia's invasion into Ukraine, the Nairobi Security Exchange (NSE) recorded a loss of Sh92 billion.
"This is biggest loss that NSE has made since March 2020 when the Covid Pandemic first struck," CMA said.
Despite the dip in capitalization levels, foreign investors made a comeback to the bourse in the quarter recording net inflows of Sh235 million compared to an outflow of Sh5.3billion in the last quarter.
"This shows a positive market sentiment by foreign investors, in spite of the impact of the Russian invasion to Ukraine during the quarter," said CMA.
Meanwhile, Market concentration for the top 5 companies by market capitalization averaged 79.23 per cent for the months of January and February 2022, compared to an average concentration of 80.16 per cent recorded in Q4.2021.
Turnover ratio as of March 25 averaged at 0.35 per cent in the period under review, down from 0.46 per cent recorded in the previous quarter signaling a drop on market liquidity levels.
Treasury bond turnover in the period under review as of March 25 amounted to Sh175billion, compared to Sh179 billion recorded in Q4 2021.
Volatility of the NASI, NSE 20 and NSE 25 share indices for the quarter under review remained low at 0.60, 0.28 and 0.45 per cent respectively.
This was an increase for the indices except the NSE 20 Share index whole volatility fell by 0.09 per cent when compared to performance in Q4 2021
"Despite a relatively volatile macroeconomic environment, we continue to encourage increased investment in the domestic market by both institutional and retail investors as the success of our markets greatly depends on our involvement across all asset classes," said Luke Ombara, Director, Policy and Market Development, CMA.