Investors at the stock market have lost Ksh149 billion in value over the past three months as share prices continue falling over currency fluctuation, price correction and the capital gains tax.
In the last week of February, the NSE 20 share index touched a seven-year high of 5,499 points with the NSE All Share index touching an all-time high of 177 points as the market capitalisation rose to Ksh2.478 trillion.
But the bourse has since swiftly retreated and by close of trading on Thursday the NSE 20 Share and All Share indices stood at 4,928 and 166 points respectively— 11 and six per cent down — with the capitalisation having dropped to Ksh2.328 trillion.
In addition to a price correction, market analysts attribute the drop to a mix of factors, including the capital gains tax and a weaker currency but say market fundamentals remain strong. They rule out chances of a prolonged bear run.
“Some stocks may have been overpriced, but this does not mean that the companies themselves are having any problems,” said Standard Investment Bank (SIB) analyst Eric Musau.
The decline has spread across the market except the single stock sectors of telecommunications (Safaricom) and investment services (NSE). The telco is up 2.5 per cent in valuation by Ksh16 billion to Ksh653 billion, while the NSE counter is up 3.5 per cent (Ksh136 million) to Ksh3.94 billion.
The biggest decline by sector has come from the commercial and services, which is down 16.8 per cent over the past three months, representing a collective sector capitalisation decline of Ksh16.4 billion to Ksh81 billion.
(BUSINESS DAILY)
