Kenya’s NSE-20 share index at 10-year low amid China-U.S.trade woes

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A man stands in front of an electronic board displaying market data at the Nairobi Securities Exchange in Nairobi, Kenya April 11, 2017. REUTERS/Baz Ratner

NAIROBI (Reuters) – The Kenyan stock exchange’s main index dropped to a 10-year low on Wednesday as foreign investors fled amid turmoil in global markets and profit-taking hit banking stocks, analysts said.

The NSE-20 share index closed at 2,545.28 points, down from 2,552.19 a day earlier. It last was near this level on March 12, 2009, when it closed at 2,453.36.

“I would attribute it to a general market issue whereby we have had foreign investor outflows,” said Sarah Wanga, head of research at AIB Capital. “There have been net foreign investor outflows, while local participation has reduced.”

Data from regulator Capital Markets Authority showed that in the second quarter of this year, foreign investors accounted for an average 69.62% of market turnover, down from 76.96% in the previous quarter and 70.80% in the second quarter of 2018.

Analysts said the Kenyan index’s slide was worsened by investors fleeing emerging and frontier assets as the U.S.-China trade war escalated.

“In the global market is the issue of China-U.S., and all markets have been heading south on the same. It’s only fair that we would be affected,” said Eric Malachi, head of equities at Genghis Capital.

The U.S.-China trade war has seen nearly $3 billion yanked out of emerging market stocks and bonds this week, financial market flow tracker the Institute of International Finance estimated.

Among leading Kenyan stocks, Bamburi Cement closed down 1.8% at 107.25 shillings, while KCB Group, Kenya’s biggest lender by assets, fell 0.38% to 39.25 shillings.

Reporting by George Obulutsa; Editing by Larry King and David Holmes

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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