Kenya’s stocks are extending a selloff that’s taken the country’s benchmark index to the steepest losses (worst performer) in the world.
The Kenyan stocks (NSE’s) all-share index posted the fourth consecutive quarter of decline in September, the longest stretch since 2017.
KCB Group Plc, Kenya’s biggest bank by assets, capped the biggest losses, losing almost 30% during the quarter.
According to Bloomberg, bad loans at the bank have hurt investor confidence.
Kenya’s debt burden has also become a focal point for investors as the country faces skyrocketing energy and food import bills and low foreign exchange reserves.
So far this year, Kenya’s stock benchmark has lost a quarter of its value, marking the worst performance among country indexes tracked by Bloomberg.
“We expect the equities market to take a hit, especially given the rising interest rates environment that we’re in, said Wesley Manambo, a senior associate for research at Nairobi-based Standard Investment Bank Ltd.
In the final week of September, the equities market plummeted, with NASI declining the most by 2.2%, while NSE 25, NSE 10, and NSE 20 fell by 1.5%, 1.4%, and 0.8% respectively, taking the YTD performance to losses of 24.0%, 9.3%, and 20.2% for NASI, NSE 20, and NSE 25, respectively.
The market is currently trading at a price-to-earnings ratio (P/E) of 4.9x, 60.0% below the historical average of 12.2x.