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Kenyan stock market took a severe beating in 2018  

By Bedah Mengo NAIROBI (Xinhua) -- The Kenyan stock market took a beating in 2018, with most investors suffering losses as securities end the year lower than they started in January.

Out of the 60 stocks listed at the market, only seven picked capital gains this year as the rest tumbled by up to 87 percent in value, an analysis of the Nairobi Securities Exchange (NSE) data showed on Thursday.

It was a bearish year for the Kenyan bourse, characterized by foreign capital flight as the investors sold most of the blue-chip stocks and exited the market for the better part of 2018.

Top gainers included Unga Group, KenolKobil, Express Kenya and Barclays Bank, with the stocks going up by between three percent and 48 percent during the year, market data showed.

Deacons, Uchumi, Kenya Orchards, Eveready, Kenya Power, Kenya Airways, East African Cables, Athi River Mining Cement and Home Africa were among the biggest losers at the Kenyan bourse.

Of the losers, financially troubled fashion store Deacons and troubled supermarket Uchumi were the worst hit, going down 87 percent and 84 percent respectively as of Dec. 24 trading.

Electricity distributing firm Kenya Power, which was dogged by corporate governance issues, has had its stock fall by 63 percent as investors disposed it off.

The decline in a majority of stocks has seen all the bourse main indices led by market capitalization, similarly, end lower in 2018.

Market capitalization, which measures shareholders wealth, stood at about 2.1 trillion shillings (about 20.6 billion U.S. dollars), as at Dec. 24 NSE trading, having shed off some eight billion dollars since April. In April, the index hit a high of 29 billion dollars, market data shows.

On the other hand, the NSE All Share Index stands at an average of 140 points, which is 17 percent lower year-to-date while the NSE 20 Share Index, which measures stocks of the best performing blue-chips, dropped below the psychological 2,800 points. The index has fallen 25 percent year-to-date.

The index on Dec. 24 stood at 2,796.72 and like the rest of the indices, it is highly unlikely that it will rise significantly in the few trading days left this year.

Analysts attributed the bad run for the Kenyan stocks this year to a number of factors including corporate governance issues several companies faced, financial troubles for some listed firms, foreign investors’ flight and lack of new listings due to restrictive regulations.

As at the end of the third quarter, foreign investors sold off stocks worth some one billion dollars as they exited the market.

The exits were highest in January, March and May, but the investors started to troop back to the bourse in the third quarter.

Geoffrey Odundo, the NSE chief executive, noted recently that good corporate governance ensures effective management of an organization, which improves business performance and attracts investors.

Despite the decline, Kenya’s capital markets remain the most sophisticated in East Africa, with 60 listed companies.


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