Equities Market Retreats as Foreign Outflows Accelerate
Overview
The NSE began the second week of October on a weaker footing, with all major indices closing in the red. The NASI fell 0.5% to 177.67, while total market capitalization declined to KES 2.80 trillion. Turnover dropped significantly by 55.7% to KES 213.97 million, as both retail and foreign investors scaled back activity amid renewed risk aversion. Net foreign outflows widened to KES 77.7 million, marking a notable reversal from the previous session’s inflows.
Equities Performance
Market breadth remained negative, with losses concentrated in high-volume counters. ABSA New Gold ETF led trading with 44.5% of total turnover, closing 1.6% higher at KES 4,755.00. Kenya Power (-2.3%) and KenGen (-4.2%) were among the top decliners, while Car & General (+7.8%) and Kapchorua Tea (+7.2%) led the gainers. The Banking Sector Index inched up 0.1%, supported by modest resilience in Equity Group and KCB, both of which sustained stable price action despite sector-wide foreign exits.
Fixed Income and Global Context
Bond market activity improved notably, with turnover surging 95.6% to KES 5.60 billion. The IFB segment accounted for two-thirds of total trades, with the IFB1/2022/19Yr issue remaining the most actively traded. Globally, U.S. markets ended mixed as investor focus shifted to upcoming inflation prints and the implications for Fed rate policy. Oil prices rebounded ahead of the OPEC+ meeting, though market sentiment remained fragile amid concerns over potential oversupply.
Market Outlook
We maintain a near-term neutral view on the NSE, expecting continued volatility as investors balance local earnings prospects with shifting global macro conditions. Short-term positioning will likely favor liquid counters with defensive attributes and stable dividend profiles.
