The Trading Room: Weekly Market Review – Week 8, 2020

Global markets took a decline this week, indicating a hit of the Corona-Virus, which has raised more concerns with an emergence of new cases in South Korea. Apple had earlier in the week issued a sales warning, citing the impact of the virus outbreak as most of its shops in China stay closed. U.S. stocks sold off and the Nasdaq had its worst daily percentage decline in about three weeks on Friday as a spike in new coronavirus cases and data showing a stall in U.S. business activity in February fueled investors’ fears about economic growth.

The Dow Jones Industrial Average .DJI fell 227.57 points, or 0.78%, to 28,992.41, the S&P 500 .SPX lost 35.48 points, or 1.05%, to 3,337.75 and the Nasdaq Composite .IXIC dropped 174.38 points, or 1.79%, to 9,576.59. Hopes of monetary easing by major central banks had propelled the S&P 500 and the Nasdaq to all-time highs earlier this week.

Benchmark US Indices


Friday’s CloseWeek’s Change% Change YTD
S&P 5003,337.75-42.413.31%
Nasdaq Composite9,576.59-154.596.73%
S&P MidCap 4002,084.44-12.181.04%
Russell 20001,678.71-8.870.61%


On Friday, the U.S. dollar fell across the board after a survey of purchasing managers showed U.S. business activity in the manufacturing and services sectors stalled in February and as investors fretted over the fast-spreading corona-virus. The dollar has outperformed most currencies this year as global investors poured money into U.S. stocks and bonds amid expectations the United States will be less vulnerable to economic fallout from the corona-virus, which already threatens to dent China’s growth rate and push Japan and the euro-zone into recession.

Locally, the Kenya Shilling weakened slightly against major international and regional currencies during the week ending February 20, due to seasonal dollar demand by corporates in the inter-bank market. It exchanged at KSh 101.25 per US Dollar on February 20, compared to KSh 100.69 on the previous week. The Treasury bills auctions of February 20 received bids totaling KSh 49.8 billion against an advertised amount of KSh 24.0 billion, representing a performance of 207.3 percent. Interest rates on the 91-day and 182-day bills remained stable, while the 364-day Treasury bill rate declined.

The Nairobi Securities Exchange experienced a moderate decline in trading volume & turnover throughout the trading week as compared to last week. Safaricom was the week’s main feature with 48.6M shares valued at Kes. 1.46Bn changing hands at between Kes. 29.80 and Kes. 31.50; this represented 58.91% of the week’s traded value.

The market sell off from foreign investors was noticeable a, reflection of global markets on the wake of COVID-19 virus. Nevertheless,most individuals continue to maintain a hold positions on the much awaited results of the banking sector in the coming weeks. Investors continue to expect KenGen Plc, Kenya Power and East African Portland cement Company to announce their results in the coming weeks once the country get’s an auditor general in office.

The Nairobi Securities Exchange week’s Week on Week (w-o-w) turnover recording a 24.4% decline to settle at Kes 2.48 Billion against last weeks turnover of Kes 3.28 Billion with an average daily turnover at 700 Million spread across the trading week against last week’s 823.5 Million daily average.

By volumes, the Market recorded a 20.9% decline in Volumes traded week-on-week, with 87 Million shares exchanging hands against 110 Million shares transacted the previous week. The average daily volume stood at 16.4 Million against last week’s 26.5 Million, with Thursday having the highest volume turnover of 27.5 Million shares valued at Kes. 873 Million.

The benchmark NSE All Share Index (NASI) closed Friday at 158.38, representing a week on week loss (W/W) of 2.46 %, a 4-week month to month (M/M) loss of 4.32%, and an overall year-to-date (YTD) loss of 4.83%.

The NSE 25 Share Index (NSE25) closed Friday at 3917.46 points, indicating a w/w loss of 2.20%, a 4 week month to month (M/M) loss of 4.01%, and an overall year-to-date (YTD) loss of 4.47%.

The NSE 20 share Index (NSE20) closed at 2498.94 points; indicating a week- on-week loss of 2.35%, a 4-week month to month (M/M) loss of 5.43% and a Year to date (YTD) loss of 5.86%.

The NSE20 Yearly market performance.

NSE’s Derivatives Market (NEXT) closed the week with a total of a total of 5 contracts worth Kes.878,000 transacted. The NSE 25 Share
contract expiring in 19th March 2020 was the main feature on the derivatives market with 2 contract valued at Kes.787,000 transacted. This was a rise in weekly turnover but a decline in total contracts traded as compared to the 8 contracts worth Kes.730,000 transacted the previous week.

The secondary Bond market at the Nairobi bourse continued to register declining activity week on week, recording a positive rise of 25.6% in activity with bonds worth Kes.11.3 Billion transacted compared to Kes.9 Billion registered the previous week.

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