Morning Note: Brace for Impact.
The world health organisation yesterday declared the novel Coronavirus [COVID-19] a global Pandemic. The announcement yesterday pushed markets into a bear run with the S&P 500 index, the Dow Jones & Brent Crude loosing well about 3%, wiping off most of the gains achieved on Monday.
The Nairobi Securities Exchange opens today in uncharted territories and could follow the European markets which tumbled more than 7% and Dow Jones and Nasdaq contracts slumped by the daily limit, while Hong Kong shares have similarly headed into a bear market. Shares in Japan lost 5% and Australian equities extended losses to 7%, getting little respite from that nation’s stimulus package. South Korea’s won led a slide in emerging-market currencies.
The NSE has not had this volatility signals since the 2008 financial crisis which was coupled by post election violence.
Yesterday, Co-operative Bank of Kenya made an offer to buyout the entire shareholding of Jamii Bora Bank Limited [JBB]. Jamii Bora has insufficient capital and has been looking for a buyer, partly under pressure from the CBK, which has preferred to shepherd mergers rather than shut down weak institutions. The Central Bank of Kenya (CBK) said the proposed transaction, which requires regulatory approvals and whose details were not disclosed, will “diversify the business models of the two institutions and enhance the stability of the Kenyan banking sector.”
KenGen Plc is warming up to bring the fight to its largest customer’s door. In a move to take advantage of the energy act 2019 which urged the government to open up the energy distribution sector. Kenya Power has for long been the only power supplied but this seeks to change with KenGen seeking to take up industrial supplies.
Here’s a wrap of how global markets performed.
• Japan’s Topix index fell 5.1% as of 12:33 p.m. in Tokyo.
• Hang Seng declined 3.8%.
• Shanghai Composite retreated 1.3%.
• Futures on the S&P 500 lost 4.6%. The gauge lost 4.9% on Wednesday.
• Australia’s S&P/ASX 200 Index declined 6.7%.
• South Korea’s Kospi index sank 4.3%.
• Euro Stoxx 50 futures plummeted 6.7%.
• The yield on 10-year Treasuries slid about 13 basis points to 0.75%.
• Australia’s 10-year yield rose three basis points to 0.73%.
• The yen rose 1.3% to 103.26 per dollar.
• The offshore yuan was at 6.9795 per dollar, down 0.1%.
• The euro bought $1.1319, up 0.4%.
• West Texas Intermediate crude fell 5.5% to $31.16 a barrel.
• Gold was at $1,635 an ounce.