Stock market billionaires reap from Nairobi bourse rally

Kenya's stock market billionaires are reaping the rewards of a thriving Nairobi bourse, which has surged to a 16-month high. Additionally, the Kenyan shilling has strengthened to a two-month high of 103.25/45 against the US dollar, with banks reducing their dollar positions. Daniel Kuyoh, an Investment Analyst at Alpha Africa Asset Managers in Nairobi, provided insights on the market movements. Kuyoh explained that the market has been on an upward trajectory since late last year or early this year, with a recent surge in activity driven by increased local investor participation, while foreign investors provided supply. The foreign investors are focusing on long-term plays, investing in resilient companies like Safaricom that have shown consistent strength despite economic shocks. Notable companies such as Britam, Equity Group, Centum, and Equity Bank have also recorded significant share price increases. Kuyoh acknowledged that political risks persist, especially with an opposition coalition set to file a petition, but highlighted that weaker economic indicators could impact market performance. However, the influx of funds from local investors, seeking higher returns amidst low bond prices, is currently driving equities' prices upwards. The NSC-20 share index reaching a 16-month high has drawn optimism from investors eyeing the 4,000 mark by the year's end. Kuyoh advised considering both the NSC-20 and all share index to make informed investment decisions. Regarding the Kenyan shilling, Kuyoh noted its volatility and suggested that future movements would depend on central bank actions, aiming to maintain a stable exchange rate. Despite concerns about the current account deficit, efforts to explore new export markets and boost foreign earnings could strengthen the shilling further. Overall, the Nairobi bourse's rally signals potential for continued growth, driven by investor confidence and strategic market plays.