Trading at the Nairobi Securities Exchange dropped by 30% in yesterday’s session. This comes in the wake of the normalcy returning to the market after the stock exchange was hit by a power blackout, frustrating investors and stock brokers alike. Yes, even the Nairobi Securities Exchange suffers from blackouts!
Shares worth Kshs. 302 million were traded yesterday, down from the Kshs. 426 million worth of shares traded on Tuesday representing a 29.1% decline in the turnover. Turnover is simply another word for revenue in business talk.
The number of shares traded also dropped from 19,585,000 million shares moved on Tuesday to 10,763,200 million shares moved yesterday. Some say that this is a reflection that the NSE is correcting itself after Tuesdays exaggerated trading. A correction can be described as a situation where the market reverts back to normal trading following a period of abnormal trading, the “abnormal trading” being Tuesday’s trading where elevated turnover was experienced.
Is there hope for the NSE this year?
Investors are hoping for better performance of the NSE this year following the bearish run experienced last year. A bear run is a situation where the market experiences a general decline over a period of time. Last year’s bear run can be attributable to the decline in the exchange rate leading to reduced foreign investment and the high interest rates in the market.
The actions of the Central Bank of Kenya and specifically the Monetary Policy Committee (MPC) will be critical to the performance of the NSE this year. The MPC is the arm of the Central Bank mandated to oversee monetary policy: achievement and maintenance of stability in the general level of prices.