Nairobi Securities Exchange (NSE) on the trading floor at the Exchange building in Nairobi on August 26, 2020. PHOTO | SALATON NJAU | NMG Investors at the Nairobi Securities Exchange (NSE) on Thursday lost Sh92 billion as global stocks plunged after President Vladimir Putin launched an invasion of Ukraine, making it the biggest single-day loss in over two years.
The market capitalisation closed at Sh2.453 trillion compared to Sh2.546 trillion on Wednesday, with Safaricom , East Africa Breweries Limited (EABL) and the big banks leading in shedding value in the wake of the sell-off.
The blue-chip stocks are a favourite of foreign investors who in recent days have been selling shares at the NSE, pushing the value of the bourse to a seven-month low.
The fall in share value was the steepest in a single trading day since March 2020, when the Covid-19 pandemic first hit Kenya.
“The flight away from the equities market is likely to be significant in the short run, particularly if the conflict is prolonged,” said Davis Gathinji, an analyst at Sterling Capital.
A major risk event like the Russia-Ukraine war usually sees investors rushing back to bonds and the safest assets in what could hurt the flow of foreign investors to the NSE given the foreigners account for over 55 percent of trading at the Nairobi bourse.
A broad offensive by Russian forces targeted military infrastructure across Ukraine as well as several airports.
The assault began hours before dawn and quickly spread across central and eastern Ukraine as Russian forces attacked from three sides.
President Putin warned of bloodshed unless Ukrainian forces laid down their arms.
The pain spread beyond stocks. Brent crude, the world benchmark, topped $100 a barrel for the first time since 2014 on its way to $105 per barrel.
This has the potential to drive Kenya’s pump prices upward and overwhelm the current State-backed subsidy that has kept pump prices unchanged for the fourth month in a row.The conflict also sent wheat prices soaring, risking a further rise in the cost of bread and cakes on rising flour prices, which will make chapatis costly.Russia and Ukraine are major sources of wheat imports for Kenya, which ships in 75 percent of its annual demand of 1.2 million metric tonnes of grain.At the NSE, the sell-off of shares by foreign investors intensified yesterday in the flight from the equities market.Foreigners made net sales of Sh195 million, up from Sh33 million on Wednesday […]
