The recent trading session at the Nairobi Securities Exchange (NSE) witnessed a significant increase in investor wealth, with a gain of Sh95.53 billion - marking the most substantial single-day gain in 18 months. This surge in market capitalization was mainly propelled by the notable performance of blue-chip companies, spearheaded by Safaricom, as local investors showed strong interest in acquiring shares, thus driving prices upwards.
Analysts have pointed out that the current market rally is primarily fueled by local investors, especially institutional investors holding significant stakes in blue-chip companies. With the market showing signs of approaching a trough, these investors seem optimistic due to potential factors such as an anticipated Federal Reserve rate cut in June and a positive MSCI review, spurred by recent market gains and the stability of the local currency. Furthermore, the improved macroeconomic indicators have instilled confidence in investors, resulting in heightened buying activity and subsequent price appreciation across various stocks.
Despite the favorable performance driven by local investors, foreign investors have been net sellers at the NSE in recent days, with significant sales recorded. While local demand remains strong, foreign investors have withdrawn a substantial amount from the market, particularly on Tuesday when they sold a net of Sh153.9 million. This follows a trend from the previous week where net sales amounted to Sh917.6 million, indicating a significant contrast to the bullish sentiment prevalent among local investors.