Stock market gains Sh102bn, records highest single-day jump in four years – Business Daily
Nairobi Securities Exchange (NSE) on the trading floor at the Exchange building in Nairobi on August 26, 2020. PHOTO | SALATON NJAU | NMG
The stock market gained Sh102.6 billion on Tuesday in investor wealth, the biggest single-day jump in four-and-a-half years as it signalled continued recovery following Monday’s Supreme Court ruling that affirmed Deputy resident William Ruto as the fifth president of Kenya.
The last time the NSE made such a large single-day gain on March 28, 2018, it was still enjoying the dividend of reduced political heat following the political handshake between President Uhuru Kenyatta and his rival in the bitterly contested 2017 poll Raila Odinga.
The handshake took place on March 9, 2018, with the NSE recording a sustained period of gains as investors eased their risk concerns that had gone up due to the chaos that followed the poll that was subsequently nullified by the Supreme Court and a repeat ordered.
The decision to annul the 2017 poll led to a crash in the market, with investors worried that a similar move this week would have had a similarly negative effect on the bourse.
This week’s gains are therefore reflective of relief among investors after the Supreme Court ruling on Monday that finally put to bed a prolonged campaign and election period that was sapping energy from business activities in the country.
The gains seen on Tuesday and on Monday were driven by local investor buying activity on large blue chips, which have largely been dominated by foreign investors. Foreign investors recorded net outflows of Sh38 million compared to net inflows of Sh28 million on Monday.
The bourse’s market capitalisation closed at Sh2.295 trillion, up from Sh2.192 trillion on Monday, adding to a gain of Sh42 billion seen on Monday as the market reacted positively to the conclusion of the presidential petition. Meanwhile, the benchmark NSE 20 Share Index ended the day two percent higher at 1807 points.
Safaricom, the largest listed firm at the NSE by market capitalisation, was the key driver of yesterday’s gains, adding Sh80 billion to its valuation following a Sh2 per share gain on the day to close at Sh31.05 per share.
The telco was also the biggest gainer on Monday, adding Sh40 billion to its valuation.
Safaricom’s large liquidity and market cap owing to its 40 billion issued shares means that its share price movement tends to drive the general market.
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