Foreign investors have sold off equities worth KSh 2.3 billion, demonstrating their continued exodus from the Nairobi Securities Exchange (NSE). President William Ruto claimed the economy had stabilised. This pattern points to a lack of trust in the Kenyan market, although local equities have been showing a gradual improvement in performance. According to Business Daily, foreign investors’ portfolio flows were negative for the first three months of 2024, with the largest selloff, at KSh 1.2 billion, occurring in March. . Investors withdrew KSh 106 million and KSh 1 billion from the market in January and February, respectively. The East African reported that the ongoing exodus of foreign investors has been associated with a discrepancy in returns, whereby investments made in developed economies provide higher returns than those made in emerging and frontier economies such as Kenya due subsequent to significant interest rate hikes. Why foreigners are exiting Kenya Rufas Kamau, the lead market analyst at FX Pesa, in an exclusive interview with TUKO.co.ke, highlighted rising energy costs and taxation as reasons why foreign businesses were closing their doors. He noted that multinational corporations left the Kenyan market due to low consumer demand, high borrowing rates, and high fuel costs. “The super-rich people find comfort in a country with a stable taxation policy, a stable currency, and a growing economy,” Kamau said. Why did De La Rue exit Kenya? De La Rue De La Rue exited the Kenyan market due to low demand for printing notes from the Central Bank of Kenya (CBK). The firm reported a 58% slump in its net profit from the Kenyan wing, from KSh 184.5 million to KSh 76.9 million. The banknotes printer spent an extra KSh 258 million to lay off staff in January. Its overall expenditure for shutting down the Nairobi unit stood at £13.9 million (KSh 2.3 billion).
by Japhet Ruto