Foreign investor outflows from the Nairobi Securities Exchange (NSE) hit Sh5 billion in February as shareholders continued to book gains made on rising prices of blue chips.
The investors continued with the trend seen in January, when they made Sh1.4 billion net sales.
The top outflow list in February was led by the four largest listed firms, data compiled by Standard Investment Bank (SIB) shows, at a time when these counters have recorded significant price gains.
Safaricom and KCB led the market in net foreign outflows during the month at Sh2 billion and Sh1.1 billion respectively, followed by Equity Bank at Sh809 million, EABL at Sh663 million and KenolKobil at Sh469 million.
Analysts said that there was some profit-taking from some investors who had entered the stocks when their prices were lower in the past, but that some of this money will most likely find its way back into the market when attractive valuations arise again.
“We might see this trend change after banks release their first quarter 2018 financials where we will see the foreign investors take buy positions in different banks,” said Genghis Capital analyst Grace Wangeci in an earlier email response.
Other than EABL, the other four counters have all recorded double digit percentage price gains this year, which has been the basis for the NSE’s positive start to the year.
The brewer is up 0.4 per cent, while Safaricom, KCB, Equity and KenolKobil have respectively gained 11.2, 10.5, 10.7 and 15 per cent since the beginning of 2018.
Although they are reaping profits, foreign investors share of equity turnover dropped compared to January to 50 per cent from 71.4 per cent in January.