Morning Note: Wuhan Opens, Global Markets Revise.
Wednesday, local markets seemed to have given up on gains achieved over the past two weeks as the benchmark indices of the Nairobi Securities Exchange slid further to levels that are likely to push further a new wave of investor panic with fears pushed further due to the COVID-19 effect. Kenya’s numbers continue to rise and the government is expecting the numbers to go higher as rapid testing is deployed starting today.
This comes at a time when Kenya Association of Stock brokers and Investment banks have also warned that increased foreign outflows could arise if the government makes god its threat and effects the proposals by treasury in the tax amendment bill set to be tabled in parliament in the coming days. This will see Multi-nationals and other foreign investors in listed firms earn reduced dividend income on a government proposal to raise withholding tax to 15 percent, cutting their take-home share of profits.
The Covid-19 outbreak has created a market in which all stocks are affected by a common factor, and tend to move in harmony, either on the topside or the downside. The banking stocks are one of the most hit in Nairobi as stocks plummeted and have been struggling to remain stable. Co-op bank which closes it’s books in a week’s time has been seen as a gainer but there’s a likelihood it will fall back after books close.
In a rundown of top economic news today, Asian shares rose on Thursday morning on hopes the Covid-19 pandemic is nearing a peak and that governments would roll out more stimulus measures, while expectations of an oil production cut agreement bolstered crude prices.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent, following a strong Wall Street close. Shares in China, where the novel coronavirus first emerged late last year, rose 0.54 per cent. Australian shares were up 1.52 per cent while Japan’s Nikkei stock index bucked the regional trend and fell 0.55 per cent as coronavirus infections in the country rose and following the government’s declaration of a state of emergency for Tokyo and other urban areas.
Oil prices extended gains on hopes major producers will cut output at a meeting later in the day in response to a collapse in global oil demand.