Morning Note: Virus Cases Rise, Trump Speaks, Asia Markets Mixed

Markets traded yesterday on stable grounds as efforts by governments worldwide to reduce investors panic seemed to have bore fruits. The Nairobi Securities Exchange turnover closed about 133% higher as compared to Monday while the NSE share indices all edged higher.However, this positive trajectory may not be celebrated for too long if global factors are to be considered.

Yesterday, the Kingdom of Saudi Arabia indicated that they will as from today push oil production to as much as 12Million barrels of oil per day. This was also after a statement from the white house indicated that U.S President Donald Trump and his Russian counterpart Vladimir Putin had both agreed that the oil price wars were a threat their nation’s and global economic development.

Crude oil benchmarks opened the month mixed on Wednesday, following their biggest-ever quarterly and monthly losses,  overshadowed by fears of global oversupply as data showed a bigger-than-expected rise in inventories in the United States. Brent crude was down by 21 cents, or 0.8%, at $26.14 a barrel by 0032 GMT, while U.S. West Texas Intermediate crude was up by 27 cents, or 1.3%, at $20.75 a barrel.

Markets fell in early Wednesday trading in Asia as investors digested a steady drip of worrying news about the economic ramifications of the global coronavirus outbreak. Major indexes in Japan, Hong Kong and South Korea were modestly lower midday, as financial markets settled into a slow grind of bad news. While the panic of recent weeks appeared to have subsided, numerous signs pointed to glum prospects for a quick recovery.

After Wall Street’s Tuesday close, President Trump said at a news conference that the United States would face “a very painful, very very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 Americans. Futures markets predicted Europe and the United States would open lower later on Wednesday. Prices for long-term U.S. Treasury bonds, a traditional investment safe haven, rose, as did gold futures.

At midday, Tokyo’s Nikkei 225 index had slid 1.2 percent and the Hang Seng index in Hong Kong had dropped 0.8 percent. South Korea’s Kospi was down 0.1 percent. Markets in mainland China, which often move at odds with stocks elsewhere, were modestly higher, with the Shanghai Composite index rising 0.4 percent.

The trend could follow in emerging markets with a high exposure in India, South Africa and Nigeria. The European markets are faced with an increased volatility that could pour out into the local bourse as well. Yesterday, the United Kingdom reported its highest death-toll yet from the corona virus. The continuous scare of the effects of the pandemic in global economies, mostly the transport, tourism and hospitality industry remain a blow to economies.

Yesterday, Kenya airways requested the government for a special bailout, so that it continues to service its aircraft as well as pay employees. KQ started feeling the pinch when it’s flights to Guangzhou were cancelled, exposing to loss of revenue of upto 30 Million per day, in terms of passenger and cargo.

For now, Markets remain volatile as the virus continues to spread in the country and East Africa as well.The recent gains by investors may not be long to live to as numbers of the Corona Virus continue to expand drastically.