As investors continue to gauge the economic impact of China’s Coronavirus outbreak, global markets started on a low but rose on Friday, most notable being oil prices that made their first gain since January. Asian shares posted great gains brought by the expectations of the government incentives to soften the impact of the coronavirus epidemic.
Market sentiment improved also after World Health Organization official said the big jump in China’s reported cases reflects a decision by authorities there to reclassify a backlog of suspected COVID-19 cases by using patients’ chest images, and is not necessarily the “tip of an iceberg” of a wider epidemic.
European shares are expected to rise, with pan-European Euro Stoxx 50 futures up 0.21%, German DAX futures adding 0.3% and FTSE futures ticking up 0.21%. MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.25% on Friday for weekly gain of 1.77%. China’s blue-chip CSI300 shares rose 0.69%, having recovered a whopping 95% of their losses made after the outbreak. The index of Chinext high-tech shares rose 0.8% to hit a two-year intraday high, led by gains in some biotech names.
The dollar’s index against a basket of currencies hit a four-month high, having risen 1.8% so far this month. The euro fell to as low as $1.0827, its lowest level in almost three years, and last stood at $1.0836.
Locally, The Kenya Shilling remained stable against major international and regional currencies during the week ending February 13. It exchanged at KSh 100.69 per US Dollar on February 13, compared to KSh 100.39 on February 6. The money market was liquid during the week, supported by government payments, which partly offset tax remittances. Commercial banks’ excess reserves stood at KSh 21.5 billion in relation to the 5.25 percent cash reserves requirement (CRR). The average inter-bank rate declined to 3.82 percent on February 13 compared to 5.19 percent in the previous week.
The Nairobi Securities Exchange experienced a rise in trading volume though a moderate decline in turnover throughout the trading week as compared to last week. Leading the pack with a 42.95% market activity was Safaricom Plc, moving 44.5 Million shares valued at Kes.1.4 Billion at prices of between Kes.30.75 and Kes.32.70.
Foreign investors continued to hold their positions as they watch the impact of the COVID-19 virus as well as hold their positions for capital gains on growth stocks, expected to announce their results in the coming weeks. Barclays Bank resumed trading on Monday as ABSA Bank Kenya Plc, moving 14 Million shares. We expect demand to rise on the top tier banks to continue this coming week as investors onboard NCBA Bank. Growing interest on Kengen Kenya Plc is expected to continue at prices of between Kes.5.46 and 5.60.
The Nairobi Securities Exchange had a 4-day trading, with the week’s Week on Week (w-o-w) turnover recording a marginal decline of 8.1% to settle at Kes 3.28 Billion against last weeks turnover of Kes 3.57 Billion with an average daily turnover at 823.5 Million spread across the trading week against last week’s 681 Million daily average.
By volumes, the Market recorded a 13.4% rise in Volumes traded week-on-week, with 110 Million shares exchanging hands against 97 Million shares transacted the previous week. The average daily volume stood at 26.5 Million against last week’s 18 Million, with Wednesday having the highest volume turnover of 40 Million shares valued at Kes. 1.12 Billion.
The benchmark NSE All Share Index (NASI) closed Friday at 162.37, representing a week on week loss (W/W) of 4.12%, a 4-week month to month (M/M) loss of 2.89%, and an overall year-to-date (YTD) loss of 2.43%.
The NSE 25 Share Index (NSE25) closed Friday at 4005.76 points, indicating a w/w loss of 3.79%, a 4 week month to month (M/M) loss of 3.86%, and an overall year-to-date (YTD) loss of 2.31%.
The NSE 20 share Index (NSE20) closed at 2559.05 points; indicating a week- on-week loss of 1.87%, a 4-week month to month (M/M) loss of 4.10% and a Year to date (YTD) loss of 3.59%.
NSE’s Derivatives Market (NEXT) closed the week with a total of 8 contracts worth Kes.730,000 transacted. A 10.1% decline in activity as compared to the 15 contracts worth Kes.812,000 transacted the previous week.
The secondary Bond market at the Nairobi bourse continued to register declining activity week on week, recording a negative growth of 19.6% with bonds worth Kes.9 Billion transacted compared to Kes.11.2 Billion registered the previous week.
