NSE Shatters Records: Single-Day Equity Turnover Hits KSh 8.8 Billion
The Nairobi Securities Exchange (NSE) made headlines on Thursday with a record-breaking single-day equity turnover of KSh 8.8 billion, a significant jump from KSh 669.4 million the previous day. This surge was driven by the sale of I&M Group Plc shares through the Block Board, pushing the listed lender’s trading volume to 167.7 million shares.
Overall, the total number of shares traded reached 197.86 million. A block trade, which is a large securities transaction privately negotiated to minimize its impact on the market price, was responsible for this significant activity.
In November 2023, British International Investment Plc announced plans to sell its shares in I&M Group to East African Growth Holding, pending regulatory approvals in Kenya and other countries where the lender operates. “Shareholders and the public should exercise caution when dealing with I&M Group Plc shares during this transition,” advised a statement issued in November 2023.
In addition to the equities market, the bonds market also saw a significant increase in turnover, rising 121.7% to KSh 5.1 billion from KSh 2.3 billion the previous day. Despite these gains, the market overall was bearish, with the Nairobi All-Share Index (NASI) dropping 1.0% to close at 113.09 points.
NSE Derivatives Market Hits Record Highs
The NSE Derivatives Market has also been thriving. In the first five months of 2024, the turnover reached KSh 64.67 million, surpassing the total turnover for the entire year of 2023, which was KSh 64.28 million. This 0.6% increase highlights the market’s steady growth since its launch in July 2019.
NSE introduced NEXT in 2019, making it the second exchange in Africa to offer Exchange Traded Derivatives. Derivatives are investment tools whose value is derived from underlying assets like currencies, bonds, commodities, interest rates, market indexes, and stocks, based on expected future price movements.
NEXT, the NSE derivatives market, facilitates trading of futures contracts in Kenya and is regulated by the Capital Markets Authority (CMA). It offers trading in Equity Index Futures and Single Stock Futures, allowing investors to profit or hedge against losses based on future price movements.
“Single stock futures give investors exposure to the price movements of an underlying stock,” the NSE explains on its website. “Parties agree to exchange a specified number of stocks in a company for a price agreed today (the futures price). NEXT Single Stock Futures will initially be cash-settled.”
This growth in both the equities and derivatives markets reflects the NSE’s expanding influence and the increasing confidence of investors in the Kenyan market.
