NSE investors lose Sh92bn in paper wealth in a day on Russia-Ukraine conflict

Vladimir Putin.

Nairobi Securities Exchange (NSE) investors Thursday lost Sh92.43 billion as prices dived on Russia's invasion of Ukraine in the middle of trading.

Russian President Vladimir Putin Thursday announced a military operation in Ukraine, triggering panic sell-off of stocks by foreign investors to seek shelter in other investment options such as fixed income.

Safaricom and banks led in the decline, pulling down the total value of all stocks on the NSE to Sh2.453 trillion—the lowest in about three months. NSE was last at this level on December 7.

The decline was from Sh2.53 trillion the market closed with on Wednesday, with the NSE chief executive Geoffrey Odundo linking the dip on the conflict between Russia and Ukraine.

“We saw more sellers than buyers. There was an immediate reaction to Russia-Ukraine matter. The investors who intended to buy held back a bit,” said Odundo in a phone interview.

“Foreign investors are looking at government securities or fixed income as is with any flight-to-safety moment. We don’t know how long this would last.”

The latest market valuation of Sh2.453 trillion means that the NSE has now shed Sh147.1 billion since Monday as weeks of intense diplomacy and imposition of sanctions on Russia failed to deter President Putin.

Safaricom — the most valuable firm on the NSE— was in the top five losers of the day, shedding 5.9 percent to close trading at Sh34.55.

At Sh34.55, Safaricom share is at levels last seen 15 months ago and cost its investors Sh82.13 billion in a day Russia announced full invasion of Ukraine.

Forty-one of the under 60 trading stocks closed the day in red on the day market turnover nearly quadrupled to hit Sh807 million from the previous session’s Sh217 million as investors rushed to sell.

The number of shares traded stood at 23 million against 5.7 million posted on Wednesday. 

Safaricom was the day’s main feature with 18 million shares valued at Sh633 million—equivalent to 78.4 percent of the day’s traded value. The shares changed hands between Sh34.05 and Sh36.45.

Foreign investors were net sellers recording net outflows of Sh195 million as compared to net outflows of Sh33 million on Wednesday, AIB-AXYS Africa data showed.

Safaricom saw foreign selling amounting to Sh578.6 million while buying came in at Sh332.26 million.

Russia, one of the largest producers of oil alongside Saudi Arabia, has triggered disruptions on the capital markets with the invasion of Ukraine triggering panic moves by investors.

Putin’s action has received condemnation from countries such as the US with President Joe Biden responding with sanctions.

UN chief Antonio Guterres was quoted urging Russia to step back from an attack that could be the “worst war since the beginning of the century with consequences”.