The markets have turned absolutely volatile these past few days, the benchmark indices of the Nairobi Securities Exchange continue to have a free fall, but are investors missing something? The price decline which started a sale-off on profit taking slowly developed to a massive investor outflow due to the fear of the effects of the Coronavirus [COVID-19] in global economy.
Global stocks plunged to four-month lows, government debt yields sunk to unprecedented levels and crude oil extended declines as anxiety over the spread of the coronavirus deepened.
The S&P 500 tumbled 4.4% to close at the lowest levels of the day. It whipsawed investors earlier, turning lower late after California’s governor said the state was monitoring 8,400 people for signs of the virus after they traveled to Asia. The decline of more than 10% since last Friday has the benchmark on pace for its worse week since the 2008 global financial crisis and helped push the index into what is known as a correction. The MSCI All-Country World Index fell to the lowest since October, while the Stoxx Europe 600 also entered a correction
Stocks
• The S&P 500 Index sank 4.4% to 2,978.48 as of 4:02 p.m. New York time, hitting the lowest in 19 weeks with its sixth consecutive decline and the largest tumble in more than eight years.
• The Dow Jones Industrial Average decreased 4.4% to 25,763.96, reaching the lowest in six months on its sixth consecutive decline and the biggest dip in about two years.
• The Nasdaq Composite Index sank 4.6% to 8,566.48, the lowest in almost 12 weeks on the largest tumble in more than eight years.
• The MSCI All-Country World Index sank 3% to 521.99, reaching the lowest in 19 weeks on its sixth consecutive decline and the biggest tumble in almost four years.
Currencies
• The Bloomberg Dollar Spot Index dipped 0.3% to 1,211.80.
• The euro gained 1% to $1.0989, the strongest in almost three weeks on the biggest climb in 21 months.
• The Japanese yen appreciated 0.5% to 109.85 per dollar, the strongest in more than a week.
Bonds
• The yield on 10-year Treasuries fell five basis points to 1.28%, reaching the lowest on record with its sixth straight decline.
• The yield on 30-year Treasuries declined four basis points to 1.78%, hitting the lowest on record with its sixth straight decline.
• Britain’s 10-year yield fell three basis points to 0.47%, reaching the lowest in almost 20 weeks on its eighth straight decline and the biggest fall in almost four weeks.
• Germany’s 10-year yield dipped four basis points to -0.54%, the lowest in almost 20 weeks.
Commodities
• Gold weakened 0.1% to $1,637.44 an ounce.
• West Texas Intermediate crude declined 3.8% to $46.68 a barrel, hitting the lowest in 14 months with its fifth straight decline and the largest drop in almost seven weeks.
At the same time, a report out has indicated that the construction sector in the NSE has been most hit in terms of Market capital erosion. The sector has been hit by the decline in uptake of Real Estate in the county since 2017. This has seen companies like Home Afrika, Bamburi, Fahari I-Reit & Crown paints tumble with Home Afrika taking the largest hit, causing investors a massive loss.
So is it a time to BUY? Well, We’d say, start getting your money ready because when the markets hit certain floors, there’s gonna be a long rally up.
