Kenyan Stocks Rally Continues on Reduced Political RiskEric Ombok
Kenyan stocks rallied as foreign and institutional investors took the peaceful passing of presidential election on March 4 as a sign political risk in the East African nation was lower.
The Nairobi All Share index has advanced 22 percent this year, the second-best performance in sub-Saharan Africa after Ghana for dollar investors. It rose for a 10th day, the longest winning streak in a month, and is trading at the highest level since June 23, 2009, when Bloomberg began tracking the data.
“Activity is upbeat, backed by a return of foreigners and institutional investors as confidence improves after the elections,” Faith Atiti, a research analyst at Nairobi-based NIC Securities Ltd., said today in an e-mailed note to clients.
Last week’s presidential election was the first since a disputed 2007 poll, after which more than 1,100 people were killed in clashes over the vote’s disputed outcome. Economic growth slumped by two-thirds in 2008.
Among the stocks trading at a record high are East African Breweries Ltd., the biggest company by market value, British American Investment Co., a financial services group, Equity Bank Ltd., the biggest lender by market value, Kenya Commercial Bank, the biggest lender by profit, and CIC Insurance Group, the biggest insurer by premiums.
The Nairobi Security Exchange’s All-Share Index advanced 38 percent last year, the top performer in sub-Saharan Africa after Nigeria. Gains on the Kenyan bourse this year have been led by AccessKenya Ltd., the country’s only publicly traded Internet company, which has surged 57 percent. Other leading stocks include Kenya Electricity Generating Co., ARM Cement Ltd. and Housing Finance Ltd.
Foreign investment represented 49 percent of all trading in Kenyan equities in 2012, up from 10 percent in 2007, according to data from the Nairobi Securities Exchange.