The Nairobi Securities Exchange (NSE) suffered a sharp downturn even as Kenya's stock of foreign exchange reserves dipped significantly in March, the latest Leading Economic Indicators report shows.

According to the Kenya National Bureau of Statistics report, the NSE 20 Share Index decreased to 3,232 points from a higher 3,750 points a month earlier, reflecting a 8.5 percent dip.

According to KNBS, the broader NSE All Share Index tumbled, hitting 195 points from a higher 216 points a month earlier.

During the month under focus, equity turnover also contracted sharply to KSh19.6 billion from KSh25 billion even as market capitalisation fell to Ksh3.2 trillion from KSh3.4 trillion over the same period. 

At the same time, Kenya's foreign exchange reserves came under pressure dropping to KSh2.5 trillion from a higher KSh2.8 trillion. This dip coincided with mixed performance of the shilling, which appreciated against the British Sterling, the euro, the yen, the South African Rand and the Uganda shilling.

Coffee sold dips, tea output decreases

Elsewhere, the agriculture industry experienced a hit with the volume of coffee sold at the Nairobi Coffee Exchange dipping to 8.4 thousand metric tonnes in March from 9.4 thousand metric tonnes in February.

During the month, the average auction price of coffee dropped sharply to $5.75 per kilo from $6.45 per kg a month earlier.

Tea production was also negatively affected with output averaging 37.4 thousand metric tonnes in February compared to 52.2 thousand realised in January. Cane deliveries equally declined to 782.7 thousand metric tonnes in March from 808.9 thousand recorded in February. 

On energy, KNBS data shows Kenya's wind and thermal electricity output decreased by 14.7 percent and 9.6 percent respectively even as the total local generation increased.

Another spot of the economy that registered resilience was on transportation with passenger traffic on the Standard Gauge Railway increasing to 193,953 in March from 185,278 although cargo volumes and revenue decreased.

Kenya's meter gauge railway experienced strong performance, with the number of people choosing it for travel rising to 263,026 from 210,251.

New vehicle registrations accelerated to 35,798 units in March from 28,137 recorded in February, led by a 93.5 percent surge in bus registrations and 40 percent growth in motorcycles. 

Building plans approved by Nairobi City County also went up, with the total value of projects increasing to KSh 22.0 billion from KSh 14.7 billion, driven by a doubling in non-residential approvals.

Mobile transactions increase

Mobile money transactions, which is often a barometer of activity in the country's informal economic activity, posted a rebound with total transaction value rising to KSh 693.4 billion in March from KSh 633.4 billion in February. The number of active agents jumped to 621,389 from 507,383.

External trade expanded, with total trade value rising to KSh 375.6 billion from KSh 326.5 billion. Notably, exports to Uganda more than doubled to KSh 13.6 billion, making Kampala the single largest destination for Kenyan domestic exports in March, ahead of the U.S. and the Netherlands. 

However, imports from Saudi Arabia also more than doubled largely due to petroleum products while the import bill as a whole grew faster than export earnings.

The Central Bank of Kenya held its benchmark rate at 8.75 per cent, even as the interbank rate eased and the 91-day Treasury bill yield drifted lower. Lending rates edged down marginally to 14.70 per cent, while deposit rates crept up to 6.86 per cent.

[email protected]