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The Trading Room: Weekly Market Review – Week 2,2020.

The stock market’s top indexes all scrambled to new highs Thursday, as global markets rallied on a cooling of U.S.-Iran tension, and after China confirmed that it will be signing a preliminary trade deal with the U.S. early next week. U.S President Donald Trump had indicated that he will be visiting China later in the year to sign the final phase of a US-China Trade deal. The US-China trade war has been blamed for slow global growth and was the main cause for fear of a global recession since 2018.

European shares fell modestly on Friday on weaker than expected U.S. jobs growth, but travel and leisure stocks gained after LSE listed Ryanair raised its profit forecast and Evolution Gaming Group announced an online U.S. casino deal.

Listed Stocks on the Nairobi Securities Exchange experienced increased activity throughout the trading week, closing higher in volume and turnover as compared to last week. The banking & Telecommunication stock continued resilience during the week and accounted for 91.43% of the total market activity. Tier 1 banks had increased demand with low supply on the market as investors take position for the full year results due within the first quarter of 2020 as Safaricom touched a new all time high of 33.50 before retreating to 32.80 at the close of close of trading on Friday. Next week’s activities are expected to be higher with increased global cohesion and economic environment expected to boost performance, this is also as more investors take position to dividend gain.

The Kenya Shilling remained stable against major international and regional currencies during the week ending January 9. It exchanged at KSh 101.47 per US Dollar on January 9, compared to KSh 101.34 on January. The CBK usable foreign exchange reserves remained adequate at USD 8,543 million (5.26 months of import cover) as at January 9. This meets the CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover.

The Nairobi Securities Exchange‘s trading week’s Week on Week (w-o-w) turnover rose by 192.3% to settle at Kes 2.66 Billion against last weeks turnover of Kes 905 Million with an average daily turnover at 664.3 Million spread across the trading week against last week’s 293 Million daily average.

Total, the Market recorded a 169.2% increase in Volumes traded week-on-week, with 70 Million shares exchanging hands against 26 Million shares transacted the previous week. The average daily volume stood at 15.7 Million against last week’s 6.4 Million with Friday having the highest volume turnover of 20 Million shares valued at Kes. 836 Million.

The benchmark NSE All Share Index (NASI) closed Friday at 171.36, representing a week on week gain (W/W) of 2.38%, a 4-week month to month (M/M) gain of 7.11%, and an overall year-to-date (YTD) gain of 2.97%.

The NSE 25 Share Index (NSE25) closed Friday at 4207.90 points, indicating a w/w gain of 1.72%, a M/M gain of 6.79%, and an overall year-to-date (YTD) gain of 2.62%.

The NSE 20 share Index (NSE20) closed at 2701.04 points; indicating a week- on-week loss of 0.25%, a 4-week month to month (M/M) gain of 3.88% and a Year to date (YTD) gain of 1.76%.

One Year Performance Chart of the NSE20 Share Index. Chart: Investing.com

NSE’s Derivatives Market (NEXT) closed the week with a total of 13 contracts worth Kes.474,000 transacted. The Equity Bank contract expiring in 19th March 2020 had 3 contracts valued at Kes.164,000 transacted. This opens the Derivatives market which had gone for two weeks without activity.

The secondary Bond market at the NSE recorded reduced market activity with 7.5 Billion worth of bonds transacting, indicating increased activity in value as compared to last week’s value of 1.4 Billion