The NSE 20 Share Index yesterday rallied  to reach a new one-year high of 3,845.93 points which marks a 20 percent improvement of the measuring index this year spurred on by equally performing blue chip shares at the Kenyan Stock Market.

More than half of the twenty share counters used to calculate the NSE 20 Share Index have climbed to record highs this month including Safaricom, East African Breweries, Kenya Commercial Bank, British American Tobacco, Barclays Bank and Bamburi Cement leading the Index to perform at this year’s best. The NSE 20 Share Index is a price weighted index that is calculated using 20 chosen shares on the local stock market and used as a tool for evaluating the NSE’s performance on a day-to-day basis.

“Most of the large stocks have been experiencing a rally through interest from mainly local investors” said Standard Investment Bank Research Analyst,  Brenda Kithinji. She also told Pesatalk that the NSE has been receiving renewed investment attention owing to the improved economic environment compared to late last year. The blue chip counters have benefited from this increased investment as reflected in their heretofore rallying performance this year, Ms. Kithinji explained.

In the six months to June this year, inflation dropped an average of 1.65 percent each month reaching 10 percent last month compared to 18 percent in January (KNBS) while the shilling has stabilized to the range of KES 84 to US dollar compared to KES 87 in December last year (CBK).

Ms. Kithinji added that the NSE 20 Share Index could continue an upward trend for the rest of this year as lowered commercial bank interest rates are expected to free up funds that will make their way to the Kenyan stock market thereby boosting blue chip share prices. Early this month, the Central Bank of Kenya reduced the base lending rate for the first time since December last year, allowing commercial banks to offer cheaper loans.

A survey by Bloomberg ranked the Nairobi Securities Exchange the third best performing in the six months to June this year after it was one of the worst performing late last year.