Kenyan Stocks Snap Longest Losing Streak in More Than 18 MonthsEric Ombok
Kenyan stocks, Africa’s third-best performer this year, snapped the longest losing streak in more than 18 months after a technical indicator showed the selloff pushed the index into oversold territory.
The Nairobi Securities Exchange All-Share Index gained 0.7 percent to close at 119.62 points, according to data from the bourse. The gauge had dropped for nine straight days, the longest since December 2011. The 14-day relative-strength index closed at 24 yesterday, below the 30 level that indicates the market was oversold and due to rise, according to data compiled by Bloomberg.
“The market had become egregiously oversold,” Aly-Khan Satchu, chief executive officer of Rich Management Ltd., a Nairobi-based adviser to companies and high net-worth individuals, said by phone.
Profit-taking after the index rallied 7.4 percent in May was prompted by a depreciating local currency, Nairobi-based Genghis Capital Ltd., said in an e-mailed note to clients after the close yesterday. The shilling, which weakened 0.8 percent against the dollar over the past 10 days, strengthened 0.2 percent to 85.55 per dollar by 5:48 p.m. in Nairobi.
Kenya Commercial Bank Ltd. dropped 12 percent in the nine days to yesterday, the index’s third-worst performer in the period, before rising 4.1 percent today to 37.75 shillings. Car & General Kenya Ltd., an automotive-parts distributor, retreated the most in the selloff, falling 17 percent before rallying to the biggest rise in eight months today, adding 9.8 percent to 25.25 shillings.
Ghana’s GSE Composite Index is Africa’s best performer this year, gaining 50 percent. The Nigerian Stock Exchange All-Share Index is up 29 percent, topping Nairobi’s 26 percent gain, according to data compiled by Bloomberg.