NSE Records 27.5% Fall In Wealth Value In 2023 After Over 6k Foreign Investors Fled Kenya

• NSE closed the last day of the trading year with a valuation of KSh 1.439 trillion, down from KSh 1.986 trillion at the end of 2022
• The drop in wealth amounting to a whopping KSh 547 billion rattled investors as the shilling continued to depreciate against the United States (US) dollar
• FX Pesa lead market analyst Rufas Kamau told TUKO.co.ke that the unstable tax policies in Kenya were scaring away foreign investors

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

The value of wealth at the Nairobi Securities Exchange (NSE) dropped by 27.5% in 2023, with NSE being ranked as the worst-performing African bourse in dollar terms in the nine months leading up to September.

How much value did NSE drop?

NSE closed the last day of the trading year with a valuation of KSh 1.439 trillion, down from KSh 1.986 trillion at the end of 2022.

The drop in wealth amounting to a whopping KSh 547 billion rattled investors as the shilling continued to depreciate against the United States (US) dollar.

According to Daily Nation, 6,256 investors fled Kenya between January and September, representing 42% of the total foreigners.

The Exchange Africa noted that the NSE 20 Share Index also declined to 1,508 points in September from 1,718 points recorded during a similar period in 2022.

Why foreign investors fled Kenya

FX Pesa lead market analyst Rufas Kamau told TUKO.co.ke that the unstable tax policies in Kenya were scaring away foreign investors and leading to low revenue collections for the government.

"The super-rich people find comfort in a country with a stable taxation policy, a stable currency, and a growing economy. The current progress of the current administration is changing tax policy rapidly, mismanaging the currency, and weakening economic growth," Kamau said.

At the same time, Daniel Kathali, an economist, told TUKO.co.ke that the downward trend in the all-share index, depreciating currency, and the unstable tax policies contributed to the exodus of foreign investors from NSE.

"In September, the NSE's all-share index registered its fourth consecutive quarter of decline, marking the longest downward trend since 2017, and that must have impacted the confidence that foreign investors have in the bourse, and the current tax policies and the depreciation of the Kenyan shilling are not helping the situation," Kathali explained.