An overwhelming supply of Safaricom shares at the close of business last week sent the counter to a new low, marking the third consecutive day that the dominant stock was breaking the floor.
A total of 72.8 million shares changed hands on Thursday, which was four times the average number of shares traded in the previous three days at an average price of Sh3.7.
The stock market was closed for business on Friday , with the country marking Moi Day. Dealers cited foreign investors exit as the credit crisis bites harder in the developed world, as the main source of supply of the shares in the market.
On Tuesday, the shares had touched Sh4.30 and reached Sh4.10 on Wednesday on increasing supply precipitating a general market decline across the stock market that saw trading halted after the NSE 20 share index fell by more than the allowable daily limit of five per cent.
“It is a reaction from Wednesday’s news,” says Samuel Mwangi an analyst at Drummond Investment bank. “People are still worried and are looking at companies which could be affected by the credit crisis.”
High strung investors also took off from the Kenya Airways counter on Thursday, causing the shares to decline by an average of 7.56 per cent to close the day at Sh37.90, the lowest they have traded in the last year.
Dealers who spoke to the Business Daily said the concerns were on the effect of tourists arrival, especially from the US and Europe.
Analysts are pointing to the financial markets crisis swirling the global stock markets and squeezing the availability of credit in the developed world.
In turn investors have sold shares, especially in companies that would be hit worst by the crisis and its after effects. NSE trading rules provides for suspension of trading when the 20 share Index drops by more than five per cent at the opening session compared to the previous day’s closing A market halt—which should not exceed 15 minutes — can also occur during a trading session when there is a technical failure of the automated trading system.
Business Daily
