NSE closes 2024 amid remarkable resilience

As 2024 draws to a close Nairobi Securities Exchange (NSE) stands out among regional peers, demonstrating a remarkable resilience and growth. The period has also been marked by a significant recovery from previous years.

Throughout the year, the bourse has witnessed a surge in investor confidence, with total market capitalisation rising by Sh419.5 billion in the first 10 months alone.  By the end of October, the market capitalisation reached Sh1.9 trillion, reflecting a substantial 29.2 per cent increase from Sh1.4 trillion at the beginning of the year.

The NSE All Share Index (NASI) recorded an impressive gain of 28.9 per cent, while the NSE 20 Share Index saw an increase of 28 per cent during the same period. This upward trend can be attributed to several key factors that have positively influenced market dynamics.One of the most notable developments in 2024 was the strong performance of the energy and petroleum sector, which emerged as a leader with a median gain of 53.5 per cent.

Companies like Kenya Power and KenGen played pivotal roles in this growth, benefiting from increased demand for energy and favourable regulatory changes that encouraged investment in renewable energy sources.

Commitment by the government to enhance energy infrastructure and sustainability initiatives has further bolstered investor sentiment in this sector. The banking sector also showed robust performance, achieving a median gain of 26.7 per cent. This growth was driven by improved financial results from major banks, which reported increased profitability due to higher interest rates and effective cost management strategies.

The sector’s resilience was further supported by a recovering economy, which saw an uptick in credit uptake among consumers and businesses alike.

In addition to sector-specific gains, several strategic developments contributed to the overall positive performance of the NSE in 2024. The exchange introduced new trading products aimed at diversifying investment opportunities for both local and international investors.

These included exchange-traded funds (ETFs) and derivatives, which attracted a broader range of participants to the market. Moreover, efforts to enhance market liquidity were evident throughout the year. The NSE implemented measures to streamline trading processes and improve transparency, making it easier for investors to buy and sell shares.  These initiatives not only fostered greater participation but also helped build trust among investors wary of market volatility. Despite these positive trends, foreign investors took a cautious approach in October, becoming net sellers during that month.

This shift may reflect concerns over global economic conditions and potential interest rate hikes in developed markets that could influence capital flows into emerging markets like Kenya. However, overall foreign participation remained significant throughout most of the year. Ahead to 2025, analysts remain oNSE closes 2024 amid remarkable resilience

As 2024 draws to a close Nairobi Securities Exchange (NSE) stands out among regional peers, demonstrating a remarkable resilience and growth. The period has also been marked by a significant recovery from previous years.

Throughout the year, the bourse has witnessed a surge in investor confidence, with total market capitalisation rising by Sh419.5 billion in the first 10 months alone.  By the end of October, the market capitalisation reached Sh1.9 trillion, reflecting a substantial 29.2 per cent increase from Sh1.4 trillion at the beginning of the year.

The NSE All Share Index (NASI) recorded an impressive gain of 28.9 per cent, while the NSE 20 Share Index saw an increase of 28 per cent during the same period. This upward trend can be attributed to several key factors that have positively influenced market dynamics.One of the most notable developments in 2024 was the strong performance of the energy and petroleum sector, which emerged as a leader with a median gain of 53.5 per cent.

Companies like Kenya Power and KenGen played pivotal roles in this growth, benefiting from increased demand for energy and favourable regulatory changes that encouraged investment in renewable energy sources.

Commitment by the government to enhance energy infrastructure and sustainability initiatives has further bolstered investor sentiment in this sector. The banking sector also showed robust performance, achieving a median gain of 26.7 per cent. This growth was driven by improved financial results from major banks, which reported increased profitability due to higher interest rates and effective cost management strategies.

The sector’s resilience was further supported by a recovering economy, which saw an uptick in credit uptake among consumers and businesses alike.

In addition to sector-specific gains, several strategic developments contributed to the overall positive performance of the NSE in 2024. The exchange introduced new trading products aimed at diversifying investment opportunities for both local and international investors.

These included exchange-traded funds (ETFs) and derivatives, which attracted a broader range of participants to the market. Moreover, efforts to enhance market liquidity were evident throughout the year. The NSE implemented measures to streamline trading processes and improve transparency, making it easier for investors to buy and sell shares.  These initiatives not only fostered greater participation but also helped build trust among investors wary of market volatility. Despite these positive trends, foreign investors took a cautious approach in October, becoming net sellers during that month.

This shift may reflect concerns over global economic conditions and potential interest rate hikes in developed markets that could influence capital flows into emerging markets like Kenya. However, overall foreign participation remained significant throughout most of the year. Ahead to 2025, analysts remain optimistic about the prospects for the Nairobi bourse.

The ongoing recovery of the economy, coupled with government initiatives aimed at fostering a conducive investment environment, is expected to sustain investor interest in the stock market.  Additionally, they say that continued advancements in technology and infrastructure are likely to enhance trading efficiency and attract more participants.ptimistic about the prospects for the Nairobi bourse.

The ongoing recovery of the economy, coupled with government initiatives aimed at fostering a conducive investment environment, is expected to sustain investor interest in the stock market.  Additionally, they say that continued advancements in technology and infrastructure are likely to enhance trading efficiency and attract more participants.