The Kenyan stock exchange’s main index has dropped to a 10-year low as foreign investors flee amid turmoil in global markets, analysts said.
Insurance, commercial and banking sector stocks are the worst hit, pulling down the NSE 20-Share Index, which captures movement of select blue chip stocks, to 2,552.19 points.
“I would attribute it to a general market issue whereby we have had foreign investor outflows. There have been net foreign investor outflows, while local participation has reduced,” said Sarah Wanga, head of research at AIB Capital.
The decline had been gradual, starting around October, Wanga said.
“Banks, in general, are doing well. However, insurance companies have been struggling and also manufacturing, in particular construction, that would be (cement manufacturer) Bamburi,” she said.
Data from regulator Capital Markets Authority showed that in the second quarter of this year, foreign investors accounted for an average 69.62% of the market turnover, down from 76.96% in the previous quarter and 70.80% in the second quarter of 2018.
Analysts said the index’s slide was worsened by investors fleeing from emerging and frontier assets as the U.S.-China trade war escalated.
“In the global market is the issue of China-U.S., and all markets have been heading south on the same. It’s only fair that we would be affected,” said Eric Malachi, head of equities at Genghis Capital.