The Trading Room: Weekly Market Review – Week 3,2020.

Global markets continue to rebound this week on the signing of the initial US-China deal at Washington on Wednesday. U.S president Donald Trump is expected to go to China later this year and sign the final deal with China’s president Xi Jinping.

The dollar rose while key world and stock indexes on Wall Street scaled new records on Thursday as the U.S.-China trade deal, strong corporate earnings and encouraging U.S. economic data lifted equity markets.Oil rose as the long-awaited Phase 1 trade deal brought some relief to markets, while gold prices slid briefly below the psychological level of $1,500 an ounce as the upbeat data signaled a healthy U.S. economy.

MSCI’s gauge of stocks across the globe gained 0.36% to an all-time high, while emerging market stocks rose 0.09%.

Central banks were active, with both Turkey and South Africa cutting their interest rates again after policy meetings as the European Central Bank published a largely upbeat set of meeting minutes ahead of a speech from its chief, Christine Lagarde.

In Kenya, the Central Bank of Kenya approved the 100% acquisition of Transnational Bank of Kenya by Nigerian Bank Access Group Plc. This will make Access Group the third west African lender to get into the Kenyan banking sector after UBA & Guarantee Trust (GT) Bank.

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 to dominate activities during the week accounting for 83.86% of the total market activity. Tier 1 banks had increased sale offs in the market with higher supply on the market as investors took profits achieved during the Christmas Santa Rally. Next week, prices are most likely to drop on Equity Bank as KCB & NCGA Group shares gain more foreign on boarding, nevertheless activities are expected to be higher with the now increased global economic environment expected to boost foreign activities on the market, 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 16. It exchanged at KSh 101.38 per US Dollar on January 16, compared to KSh 101.47 on January 9. The CBK usable foreign exchange reserves remained adequate at USD 8,496 million (5.20) months of import cover) as at January 16. This meets the CBK’s statutory requirement to endeavor 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 50.38% to settle at Kes 4.0 Billion against last weeks turnover of Kes 2.66 Billion with an average daily turnover at 728 Million spread across the trading week against last week’s 664.3 Million daily average.

Total, the Market recorded a 39.29% increase in Volumes traded week-on-week, with 97.5 Million shares exchanging hands against 70 Million shares transacted the previous week. The average daily volume stood at 18.2 Million against last week’s 15.7 Million with Thursday having the highest volume turnover of 22 Million shares valued at Kes. 955 Million.

The benchmark NSE All Share Index (NASI) closed Friday at 166.23, representing a week on week loss (W/W) of 2.99%, a 4-week month to month (M/M) gain of 3.95%, and an overall year-to-date (YTD) loss of 0.11%.

The NSE 25 Share Index (NSE25) closed Friday at 4102.13 points, indicating a w/w loss of 1.18%, a 4 week month to month (M/M) gain of 4.07%, and an overall year-to-date (YTD) gain of 0.56%.

The NSE 20 share Index (NSE20) closed at 2669.13 points; indicating a week- on-week loss of 0.12%, a 4-week month to month (M/M) gain of 3.06% and a Year to date (YTD) gain of 0.04%.

The NSE20 1 Year Share Performance

NSE’s Derivatives Market (NEXT) closed the week with a total of 19 contracts worth Kes.830,000 transacted, this indicated an increase in activity from the 13 contracts worth Kes. 474,000 transacted the previous week.

The secondary Bond market at the NSE recorded a rise in market activity with 11.2 Billion worth of bonds transacting, indicating increased activity in value as compared to last week’s value of 7.5 Billion

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