The Nairobi Stock Exchange (NSE) hit a 16 month high on Monday, as investors are prompted to return to the market by lower credit costs, and the Shilling holding out against the Dollar.

Investors were seen buying back into the Kenyan market on Monday, as expectations continue to mount in anticipation of improved performances by companies this year.

Last year the NSE experienced a slowing as investors eased away from buying in the East African country due to the high cost of credit hampering companies’ performances.  The debt market was also hit by the shying away of investors in 2011 – causing the NSE to record an overall poor year.

However, the trend is changing this year with buying picking up; the NSE-20 Share Index climbing 0.9 per cent hitting 4,029.50 points on Monday – signalling the first time in over a year that the Index rose above the 4,000 mark, the last time this happened being 14th June 2011.

This year’s highest gainer so far is supermarket chain Uchumi, whose shares have grown by over 150 per cent this year to date.  On Monday Uchumi shares rose 1.6 percent closing trading at 19.65 shillings ($0.23), as investors rushed to buy into the grocery trader amidst speculation that a dividend payment may be imminent.

Another big gainer on Monday was TransCentury; shares in the holding company spiking the maximum 10 per cent allowed trading at 22 shillings ($0.25) following the company’s announcement that it is to sell a stake in its Tanzanian tea packaging unit.

Meanwhile, the Shilling is also holding stable on the foreign exchange market, trading at 85.10 shillings to the dollar on Monday.  The Kenyan currency has seen only a 0.1 percent increase over the year to date.

Despite the currency falling last year in response to increasing credit prices and growing inflation, this year the Shilling is seeing a stabilising, as credit prices and inflation falls.  In September inflation levelled out at 5.3 percent prompting speculation that the Central Bank may be set to cut interest rates in the near future.


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