Foreigners sell off Ksh.4.3B stocks in November’s NSE retreat

Foreigners sell off Ksh.4.3B stocks in November’s NSE retreat

  • In contrast, the foreigners had only withdrawn stocks valued at Ksh.1 billion ($9.2 million) in October.
  • The sell-off activity by the foreign investors has coincided with the retreat of the markets across November.

Foreign investors dumped stocks worth Ksh.4.3 billion ($38.3 million) at the Nairobi Securities Exchange (NSE) as the performance of the equities market declined in the period.

In contrast, the foreigners had only withdrawn stocks valued at Ksh.1 billion ($9.2 million) in October.

The sell-off activity by the foreign investors has coincided with the retreat of the markets across November.

During the month, the market was on a downward trajectory with the Nairobi All Share Index (NASI), NSE 20 and NSE 25 declining by 7.9, 4.6 and 5.7 per cent respectively.

The retreat was primarily driven by losses in large cap stocks including Safaricom, EABL and the Diamond Trust Bank (DTB) whose share prices shrunk by 5.3 and 3.6 per cent each, respectively.

Gains in counters such as Absa and NCBA have however mitigated losses made in the period.

Foreign investors have remained NSE net sellers so far in 2021 with just three months of positive inflows from the participants through the first 11 months of the year.

The market has seemingly been unable to shake off the volatility caused by the ongoing COVID-19 pandemic run with most counters remaining in the negative for the year.

The NSE price to earnings ratio has once again fallen below the historical average pointing to the slight undervaluation of counters at the bourse.

Nevertheless, the price/earnings-to-growth (PEG) ratio is above the historical average pointing to the over valuation of stocks relative to expected earnings growth.