Investors at the Nairobi Securities Exchange (NSE) lost over a Sh100 billion in 2016 after a majority of stocks across all counters saw their values eroded.
This as the market sustained a bear run - a period of time when prices fall on a financial market - that was also experienced in 2015.
Market capitalisation stood at Sh1.93 trillion at the close of 2016, which is in comparison to Sh2.05 trillion at the end of 2015.
According to NSE’s annual market report, the NSE 20 share index declined by 21 per cent to 3,186.21 points by the close of 2016. This is compared to 4,004.91 points a year earlier.
The market has been on a decline for the last two years now, going by the NSE 20 share index, which closed 2014 on a relative high of 5,091.60 points.
“The bourse closed the year with the bench mark index - the NSE 20 share index - losing 21 per cent to settle at 3186.21 points,” said NSE in the report.
The 20 share index is a price weight index calculated as a mean of the 20 largest stocks by capitalisation.
The NSE report also noted that equity turnover declined by 30 per cent to Sh147 billion from Sh209 billion posted in 2015.
Annual trading volumes decreased to 5.8 billion shares, down from 7.3 billion shares posted the previous year.
Safaricom and Equity Bank were the stocks that registered the highest activities in the market over the year.
Safaricom was the biggest mover with 2.3 billion shares valued at Sh43.4 billion changing hands while Equity Group’s 717 million shares valued at Sh25.8 billion were traded in 2016.
The top five losers for the year were Uchumi, whose share price declined 63.9 per cent, Kapchorua Tea (60 per cent), National Bank (54.3 per cent), Sanlam (54.2 per cent) and Home Afrika (53.8 per cent).
Among the few stocks that posted an improved performance during the year included KenolKobil, Kenya Airways, Safaricom, British American Tobacco (BAT), Kenya Power and Longhorn Publishers. Analysts note that different factors contributed to the performance of these stocks, some of which were unique to the companies and their industries.
“During the year, the Kenya equities market performed poorly as a result of declines in large stocks,” said an analysis report from Cytonn Investments.
“KenolKobil rose on the back of the company recording an impressive 84.6 per cent gain in core earnings per share for financial year 2015 results, while Kenya Airways was supported by positive boardroom changes that saw investor confidence in the management of the airline improve.”
Another five firms have issued profits warnings, projecting that their profits will decline by at least 25 per cent.
These are NSE, Sasini, Sameer, Sanlam and Deacons.