Nairobi Securities Exchange (NSE) is the worst performing bourse in Africa in the first nine months of 2023, based on a ranking by Morgan Stanley Capital International (MSCI) Index.
The ranking was done by MSCI based on dollar returns and sheds light on the effects of the exit of foreign investors and global shocks on the largest stock exchange in East Africa.
MSCI Index is a significant source of information on investments opportunities for foreign investors and comes on the back of a significant weakening of the NSE All Share Index.
According to MSCI, NSE All Share Index shed 41.9 per cent to 627.4 points, followed by the Zimbabwe Stock Exchange which was ranked the second worst performing at -34 per cent.
The performance of the NSE All Share Index declined due to the weakening of the Kenya shilling and a drop in the share price on constituent stocks resulting in Kenya’s poor show.
According to the official Central Bank of Kenya (CBK) rate, the shilling weakened against the US dollar by 16.9 per cent in the first nine months of 2023 to exchange at 148.45 per dollar.
The share price of Safaricom, NSE’s largest stock by market capitalisation, declined by 36 per cent to Sh14.70, Equity’s fell by 21 per cent and EABL’s dropped 23.5 per cent since January.
Safaricom, Equity Group and EABL are among the few NSE-listed companies that have consistently paid out dividends to shareholders but have witnessed foreign investor selling.
In the first nine months of 2023, NSE recorded Sh18.6 billion in net foreign outflows with Nigeria, South Africa, Tunisia and Zimbabwe posting negative returns of 7.4 to 34 per cent.
The remaining five of the nine African markets considered by MSCI Index, Egypt, Mauritius, Ivory Coast, Botswana and Morocco posted positive returns of 5.5 to 16.3 per cent.