The self-listed Nairobi Securities Exchange (NSE) is battling a crisis of confidence over the continuous decline in stock prices, which has seen close to a half of the stockbrokerage firms that held shares in the Kenyan bourse sell their stake over falling returns and uncertainties over the market’s recovery prospects.

The EastAfrican has learnt that out of the 17 brokerage firms that controlled close to 56 per cent of the exchange after the initial public offering six years ago (July 2014), eight firms have sold off their shareholding while others such as NIC Securities Ltd and Dyer Blair Investment Bank have reduced their stakes.

Latest data from the Capital Markets Authority (CMA) shows that by February foreign investors controlled 52.62 per cent of the exchange while local individual and institutional investors held 12.39 per cent and 34.9 per cent of the shares respectively.

A review of NSE Plc’s financial performance shows that the firm’s net profit dropped to Ksh80 million ($800,000) in 2019 from Ksh320 million ($3.2 million) in 2014, while shareholder dividends declined to Ksh0.08 ($0.0008) per share compared with Ksh2 ($0.02) per share in 2013 — the last year before the exchange opened its ownership to the public.

Overall, foreign investors control over 60 per cent of the activities at NSE and during the three months to March this year they sold off shares amounting to Ksh11.18 billion ($111.8 million) largely due to panic trading over Covid-19.