Kenya Stocks Drop Ninth Day, Worst Losing Streak in 1 1/2 Years
Kenya’s main stock index fell for a ninth day, led by declines in the local units of Diageo Plc, the world’s largest liquor maker, and Standard Chartered Bank Plc.
The 55-member Nairobi Stock Exchange All Share Index dropped as much as 3.1 percent and traded 1.6 percent down at 78.22 by 2:09 p.m. in Nairobi, poised for the lowest closing level since Sept. 9. It was the worst performance worldwide among almost 90 major indexes tracked by Bloomberg News. The gauge has fallen 5.2 percent in the past nine trading sessions, the longest streak of losses since March 2009.
“Fund managers are closing positions to re-evaluate performance for 2010 and start strategizing for 2011,” George Bodo, a research analyst at Nairobi-based Genghis Capital Ltd., said in a phone interview. “The drop has been significant because generally there has been a trend of profit taking. It is called ‘the Santa Claus effect.’”
The All-Share Index has still advanced 34 percent this year, outpacing a 14 percent gain in the MSCI Frontier Markets Index during the same period. Kenya’s benchmark NSE 20 Index of the 20 biggest companies on the exchange may end the year at 4,300 if the losing streak continues, Bodo said. The gauge closed at 4,390.98 yesterday, according to Bloomberg data.
East African Breweries Ltd., 43 percent owned by Diageo, slumped 4.7 percent to 202 shillings. A close at this level would be the lowest since Oct. 19. Standard Chartered Bank Kenya Ltd., the East African nation’s third-biggest lender by market value, declined 2 percent to 260 shillings on the first day the stock traded without the right to a dividend of 4.75 shillings. Barclays Bank of Kenya Ltd. slumped for a sixth day.
To contact the editor responsible for this story: Antony Sguazzin at firstname.lastname@example.org.