Market performance at the Nairobi Securities Exchange has shown considerable improvement on both equities and bonds according to data from the Capital Markets Authority Quarterly Statistical Bulletin.
The Authority said Market capitalization increased by 20.88% to Kes. 2.44 trillion registered in Q1. 2021 from Kes. 2.01 trillion in Q1. 2020. This same trajectory was also recorded when compared against the quarter ended December 2020. End of the first quarter of 2021, market capitalization recorded a 4.29% increase to Kes. 2.44 trillion up from Kes. 2.34 trillion recorded in Q4. 2020.
In the equities market, turnover for Q1.2020 stood at Kes. 31.73 Billion, compared to Kes. 27.51 Billion registered in Q4.2020, a 15.34 % increase. Conversely, year on year equity turnover showed a 27.39% decrease from Kes. 43.70 Billion in Q1.2020 to Kes. 31.73 Billion in the quarter ending March 2021.
The Authority attributed the growth to easing the containment measures put in place to ease the spread of the coronavirus. Consequently, the mass vaccination set to take place in the country in the next few months has also contributed to the performance of the market.
Foreign investor net cashflow recorded a net outflow at Kes. 976 million, an improvement compared to Kes. 2.67 Billion net outflows for Q4.2020.
Equity trading remains foreign-dominated, with an average of 60.38% accounting for foreign investor participation in Q1.2021. The bond market turnover increased in Q1 2021 by 17.80%, with Kes. 199.38 Billion worth of bonds traded compared to Kes.169.26 Billion traded in Q4. 2020. With a bond turnover of Kes.157.98 billion recorded in the first quarter of 2020, this shows a 26.21% increase in bond turnover using year on year comparison.
The derivatives market registered a 132.68% increase in the volume traded closing the quarter at 947 contracts in Q1.2021 compared to 407 contracts traded in Q4 2020. Notably, the turnover recorded a 353.51% increase closing the quarter at Kes 46.83Million compared to Kes 10.33 Million recorded in Quarter 4 2020. The number of deals also increased by 84.35% in Quarter 1 2021 closing the quarter at 271 deals from 147 deals registered in the previous quarter
The authority further said in its 2021 outlook for Kenya; the World Bank recognizes that economic recovery is underway; however, it is uneven for different sectors in the economy.
However, the prevailing coronavirus pandemic has brought about uncertainty in the country’s economic outlook following the recent spike in COVID-19 cases that has seen the government put in place measures to curb the spread of the virus.