By Jackson Okoth

Activity at the Nairobi Stock Exchange (NSE) is expected to improve in the coming weeks, after Safaricom’s shares moves past the Sh5 offer price for the first time in months.

"An improved price for Safaricom shares could have an upward spiral on other counters. It is also a signal of confidence slowly returning to the market," said Job Kihumba, Executive Director, Standard Investment Bank.

In the past week, robust trading in Safaricom shares, driven by demand from foreign investors, pushed up the price to Sh5.15 when the markets opened yesterday.

NSE’s December Monthly Bulletin ranks Safaricom as the most active counter, by volume, value traded and market capitalisation. Daily trading in Safaricom shares now accounts for more than half of the entire equity turnover at the Nairobi Stock Exchange (NSE).

Last month, a total of 132.9 million Safaricom shares were traded, compared to Equity Bank’s 17.2 million, Co-operative Bank of Kenya’s 9.97 million, Mumias Sugar’s 9.82 million and Kenya Commercial Bank’s 8.04 million.

Others in the top 10 most traded counters were Kenya Re-Insurance Corporation, KenGen, Kenya Airways, AccessKenya Group and Sasini Limited.

"We expect the fixed income securities to continue its dominance in the first part of the year. However, equities will also take an upward direction as foreign investors, seeking for higher returns, move back to emerging markets," said John Kirimi, MD Sterling Investment Bank.

Available figures indicate that the NSE 20 Share Index, a key measure of activity at the stock exchange, rose steadily from 3,147.43 points on December 14, to 3,349.59 points when the market opened for trading on Monday.

Market signals indicate that the worst may be coming to an end for the Nairobi bourse.

Bear run

With jitters from foreign and retail investors and a crippling global recession, the NSE was on a bear run going back to the 2007 General Elections. But all this is changing.

"Last year had its fair share of disappointments at the bourse. However, things are looking up, with several strong indicators pointing to an upswing," said Jane Njeru, Chief Executive Officer, Kenya Association of Stockbrokers and Investment Banks (KASIB).

The association is betting on more rain, recovery of the global economy and higher earnings, profits, and dividend payouts, to push up prices of listed companies at the exchange.

The planned sale of the Government’s stake in several public-owned sugar factories, National Bank of Kenya and Consolidated Bank, also boosted activity at the bourse.

The Government will sell 19 per cent of its stake in the sugar firms through an initial public offerring (IPO).