Investors at East Africa's bourses seem to have taken a breather over the past two weeks after a rally in the stockmarket towards the end of last year pushed indices to new highs. The Kenya , Rwanda , Uganda and Tanzania bourses have been on a relative drag, compared with the period to the close of 2013, with only a slight change in market indices. However, analysts are predicting increased activity in the coming months. They project that the region's bourses will benefit from relatively low inflation rates, which should leave consumers with more money to invest. READ: Stockmarkets set new performance records in 2013, NSE best in Africa The relative pickup of the global economy and the quantitative easing in the US have also revived international capital flows. Steady foreign interest in regional stockmarkets is expected to see indices rise significantly this year, alongside the turnover. At the Nairobi securities Exchange (NSE), while volumes traded almost tripled in the two weeks to January 14 to reach 29 million, from 11 million shares traded on the first day of trading in 2014, the benchmark 20 Share Index rose three per cent to 5058.51, from 4910.74. The NSE All-Share Index (NASI) has risen to 141.01 from 140.79 at the beginning of the year. As stocks indicators rose, trading in bonds was on a downward spiral towards the end of 2013. The bond market closed the year on a low as trading declined, with investors shunning bonds to cash in on the rising share prices. In December, trading stood at $279 million as turnover nearly went back where it started in January at $234 million . The decline in bond trading towards end of last year was partly attributed to falling yields. Yields of most bonds plummeted from a high of 14 per cent in June last year to about 12 per cent in December. "The NSE gave impressive returns in 2013 driven by dividend pay-out and company financial releases as well as expectations of positive performance as inflation and interest rates maintained at sentinel levels. The bourse also attracted increased investments from international institutions looking for high returns in Africa owing to Fed's alteration of its monetary policy stimulus, while investors sought growth avenues in emerging markets with Africa increasingly visible in global stockmarket performance," said Old Mutual Securities in a research note. The Rwanda Securities Exchange (RSE) Share Index (RSI) gained less than one per cent to reach 233.94 points on January 13 from 232.42 points at the beginning of 2014, pushed by Bralirwa and Bank of Kigali shares, the only counters that have been trading since the beginning of 2014, with analysts predicting a similar trend this year. The market recorded 105,900 BoK shares and 46,700 Bralirwa to close 2013. The Uganda Securities Exchange (USE) has started on a low note, with the All Share Index gaining less than one per cent to reach 1,521 points on January 15 , from 1,520.88 two weeks ago. Activity on Dar bourse The Dar es Salaam Securities Exchange (DSE) Index has registered a minimal increase of 1.8 per cent per cent from 1,870.180 at the beginning of the year, to 1,904.200 points last week. The Tanzania Share Index almost doubled in 2013, jumping 95 per to 2,839.680 at the close of the year, from 1,455.52 in January 2013 . Analysts at the Tanzania Securities Ltd said they expected continued subdued activity in the coming weeks, with moderate support from foreign investors and some locals."Activity is expected on NMB, CRDB and cement counters as speculators take positions," said Brenda Massay , an analyst at the TSL. In Kenya , analysts said activity at the bourse is expected to pick up in the coming weeks ahead of the financial reporting period in March. "Investors buy more shares at this time in readiness for anticipated positive annual results in the first quarter of the year which push prices up," said Eric Musau , an analyst at Standard Investment Bank . African bourses' performance will improve this year experts say, riding on a stable economic environment demonstrated in 2013 and which is expected to prevail in 2014. Inflation and interest rates are expected to fall further as the shilling across Kenya , Uganda , Tanzania and the Rwandan franc stabilise. The rebound of equity market activity is tied to the recent slowdown in Uganda , Tanzania , Rwanda and Kenya inflation rates and the relative pick up of the global economy, which have restored investor confidence and revived international capital flows, analysts said. READ: EAC countries held single-digit inflation in 2013 "We are seeing improved economic conditions in Uganda , which is lifting the stockmarket. The year is going to be a good one for stockmarkets across the region too," said Arthur Esiko, a research analyst at African Alliance Uganda. "Foreign investors have returned to the market and they are actively investing in equities," he said. Most investors who put their money in the stockmarkets got handsome returns, especially at the NSE, which closed the year as the best performing bourse in Africa and the fourth in the World, according to the MSCI index — the stockmarket index of some more than 1,600 "world" stocks.
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