[2008-10-10]  Brokers optimistic NSE fortunes will turn
The bearish Nairobi Stock Exchange (NSE) will soon pick up despite fears that the current economic down turn in the US, Europe and Asia could keep it on the low, an association of stock brokers and investment banks have predicted.

The Kenya Association of Stockbrokers and Investment Banks (KASIB) said on Wednesday the Kenyan economy had substantially recovered from the after shocks of the chaos that followed the disputed December 2007 Presidential election results and would soon normalise.

“ The second and third quarter results of most listed companies have showed a positive growth pattern and the fourth quarter is likely to see this trend continue. Contrary to what some quarters may think, the international downward spiral and turbulence in the stock markets may have no direct impact on the NSE,” the association said arguing that there is no common investor base between the NSE and those exchanges in developed economies that would cause a joint response to fundamentals.

Recovery path

The group said that though challenges still lay ahead in the recovery path of the stock market, positive economic enhancing strategies such an order by President Mwai Kibaki to have taxes on power tariffs reviewed would spur growth and cushion the market from further slumps.

“The market has bottomed out and is poised to start picking up. Low price levels may dampen investor confidence but this is a cyclical occurrence that investors must learn to live with. Investors in the stock market are therefore advised to look out for bargains that exist currently in the market,” they said.

KASIB cited the coming Co-operative Bank IPO, as an opportunity for investors to redeem themselves from the effects of the bearish market.

“Co-op Bank has grown significantly in the last decade to become a truly major player in the banking industry and would no doubt entrench this position with the proposed IPO. Despite the challenges faced in the previous IPOs the council remains confident that lessons have been learnt from the past experience and that the problems that were encountered will not recur this time round,” they said.
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