In a departure from the trend observed in the first half of the year, foreign investors have emerged as net buyers on the Nairobi Securities Exchange (NSE) in the past week, in what is a shift in investor sentiment.

Foreign investors were the dominant players yesterday accounting for 57.1 per cent of the total market turnover.

Foreign investors turned bearish on key blue chips to print net outflows of  Sh4.2 million the day. This as foreign inflows surged to an impressive Sh689.1 million last week, marking a substantial increase from the preceding week’s modest Sh169 million.

Remarkable uptick

“The bourse opened the week with a total of 24.5 million shares valued at Sh462.9 million, against 10 million shares valued at Sh230 million posted on Friday,” noted NSE at the close of business yesterday.

This sudden surge not only signifies a remarkable uptick in foreign investment but also signals a strong break from the patterns that defined the earlier months of the year.

The move has the potential to bolster stock values and elevate the overall market performance, offering a glimmer of hope amid economic uncertainty.

This influx of foreign capital stands out as the most substantial weekly net foreign inflow since February 2021, magnifying the importance of this change.

“Foreign investors assumed a net buying position by accounting for 2.5 per cent of total market sales and 76 percent of total market purchases,” reported Dyer and Blair Investment Bank in its Friday update.

While the specific motivations behind these investment decisions remain unclear, the overarching impact on market dynamics is undeniable. Some market observers speculate that this reallocation of resources might stem from a reevaluation of risk and return perceptions within the Kenyan market.

Of notable significance, foreign investor participation in NSE activities surged to 48.9 per cent last week, demonstrating a substantial rise from the preceding week’s 42.6 per cent.

This surge underscores the growing allure of the NSE among foreign investors and reinforces the idea of a potential turning point in their outlook toward Kenyan securities.

Financial analysts say improved economic indicators, corporate earnings, and potential alterations in global investment strategies may have contributed to this transformation.

The mounting appeal of specific Kenyan stocks could also be contributing to the increased foreign inflows.

The shift is fuelling hopes for ongoing upward momentum and the potential for sustainable growth, providing a promising outlook for the local market’s future trajectory.