NAIROBI, Aug 7 (Reuters) - The Kenyan stock exchange’s main index has dropped to a 10-year low foreign investors flee amid turmoil in global markets and profit-taking on banking stocks, analysts said.
On Tuesday, the NSE-20 Share Index closed at 2,552.19 points, down from 2,575.73 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. There have been net foreign investor outflows, while local participation has reduced,” said Sarah Wanga, head of research at AIB Capital.
The decline had been gradual, starting around October, Wanga said.
“Banks in general are doing well. However, insurance companies have been struggling and also manufacturing, in particular construction, that would be (cement manufacturer) Bamburi,” she said.
Data from regulator Capital Markets Authority showed that in the second quarter of this year, foreign investors accounted for an average 69.62% of the market turnover, down from 76.96% in the previous quarter and 70.80% in the second quarter of 2018.
Analysts said the index’s slide was worsened by investors fleeing from 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. (Reporting by George Obulutsa; editing by Hereward Holland, Larry King)
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