What you need to know:
For Alois Chami, a vocal and self-taught investor who joined the Nairobi bourse in 1973, he had one strategy: spread risks across all counters.
But now he says for many of his counters, waiting for dividends has become like watching the grass grow; sometimes it withers.
And now investors are increasingly consolidating their shares in just a few counters, in search of stability.
Some are buying. Others are selling. Both think they are right. That is what drives turnover at the Nairobi Securities Exchange (NSE).
For Alois Chami, a vocal and self-taught investor who joined the Nairobi bourse in 1973, he had one strategy: spread risks across all counters and spare yourself the need to keep looking at the trading board.
He knew that at one point, some shares would be gaining and others would be losing. And at the end of the year, some would pay dividends while others won’t.
But now he says for many of his counters, waiting for dividends has become like watching the grass grow; sometimes it withers.
“My first counters were East African Breweries, Nation Media Group and British American Tobacco. I have held on my stocks from IPS building, Stanley Hotel and Nation Centre to The Exchange,” Mr Chami reminisces.
“All listed companies were only growing then. But the ground has shifted now and am not getting as much reward as I used to. Maybe I should have put my eggs in a few baskets. But how could I predict the right baskets?”
The shift in the ground has come in the form of once sparkling counters such as Uchumi, Mumias, Eveready and TransCentury losing shine while others such as Rea Vipingo and Access Kenya delisting.And now investors are increasingly consolidating their shares in just a few counters, in search of stability. Top stocks The five biggest stocks at the NSE were at the end of June dwarfing the rest of the stock market at an unprecedented level, holding Sh1.6 trillion or 76 percent of all the wealth of investors, the highest in 12 years.This has increased the concentration risk at the bourse despite attempts by the Capital Market Authority (CMA) to introduce new products and listings to give investors an array to choose from.CMA data shows Safaricom, Equity, East African Breweries, KCB and Cooperative bank command an unparalleled level of concentration thanks to their steady run over the years.The current dominance by […]
