NSE Investors lost Sh56.7 billion of paper wealth at the NSE on Monday.
This is the biggest daily drop since March last year.
The market soured for investors holding Safaricom stocks to lose Sh56 billion as its share price declined to Sh38.5.
NSE Investor Losses
East African Breweries shed Sh1.1 billion, Equity Bank lost Sh943 million and Coop Bank cut Sh880 million whereas KCB shareholders gained Sh1.2 billion.
Standard Investment Bank’s Executive Director for Research Eric Musau said the Safaricom dip was mainly driven by market forces.
This is after supply built up when the stock rose to Sh40 at the beginning of the year according to The Star.
“There has been a demand for Safaricom as it started rallying towards Sh40.
Then we started getting supply build-up from people who are willing to sell at that price, which pulls back the share price,” Mr. Musau said.
The Nairobi bourse has been making uneasy gains this year rising to Sh2.61 trillion at the close of trading Monday.
It has however remained volatile even as the country enters a period of heightened political contest.
Kenya’s economy has a history of slowing down during election years when firms put investment decisions on hold, pending a return to normalcy.
Economic growth, for example, slowed to 4.81 percent in 2017.
This is as a result of the bitterly-contested presidential poll from 5.88 percent a year earlier.
Mr. Musau said politics may not play a big role in determining the NSE trends this year.
This is as the economy is expected to remain resilient as companies emerge stronger from the struggles of the Covid-19 pandemic.
“This year politics may not weigh in a lot.
What we have seen is that the companies that survived through Covid have really strengthened and cut costs.
We are beginning to see positive indications like higher employment figures, higher tax collections, signaling growth,” he said.
This year, Kenya’s GDP is expected to grow six percent, according to the Central Bank of Kenya up from an earlier projection of 5.6 percent.