NSE CEO Geoffrey Odundo speaks on H1 market performance

Kenya's stock markets have defied a turbulent first half of 2023 to hold steady despite facing intermittent shocks linked with a weakening shilling and political jitters. Nairobi Securities Exchange CEO, Geoffrey Odundo, in an exclusive interview with CNBC AFRICA, highlighted the market's resilience and performance. Odundo noted that the equity markets have grown by 9.45 percent year to date, with domestic investors driving increased interest. The bond market, however, has seen a decline of about 19 percent due to rising interest rates at the primary level. Despite this, market valuations remain attractive, with price to earning multiples below 10, making Kenya's market one of the best in Africa currently. Foreign investors are returning to the market attracted by the favorable valuations and double-digit yields on stocks. Odundo expressed optimism about the market's recovery and potential for future gains. The interview also touched on the impact of the new central bank governor's approach to curbing inflation by tightening market supply. Odundo acknowledged that this might lead to muted performance in the short term on the secondary market. Looking ahead to the second half of the year, Odundo discussed the growth of tradable market instruments like REITs, ETFs, and derivatives. He highlighted a resurgence in the REITs market, increased interest in ETFs, and the potential of the derivatives market. The NSE aims to sustain growth and diversify its offerings to maintain market performance. Addressing political risks, Odundo recognized the uncertainty but emphasized the fundamentally strong companies trading on the market. He projected a defensive and stable market in the short term but warned of potential long-term impacts from unresolved political issues. Lastly, Odundo discussed efforts to attract more companies to list on the NSC, highlighting progress with the privatization bill and government commitment to the listing process. Overall, Odundo's insights provide a comprehensive overview of Kenya's stock market performance and the strategies in place to navigate challenges and drive growth in the coming months.