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The Trading Room: Weekly Market Review – Week 21, 2020

Stocks had globally started the week strong, helped by news by Moderna Inc encouraging early test results for a possible coronavirus vaccine, but fell back modestly on Tuesday attributed in part to a press report questioning whether Moderna’s early trials had produced enough data to support evidence for the vaccine’s effectiveness.

United States

The S&P 500 Index touching its highest level since March 6 on Wednesday before falling back somewhat. Small- and mid-cap stocks saw the strongest gains, and slower-growing value shares outperformed higher-valuation growth shares.Optimism about a possible new round of monetary and fiscal stimulus also seemed to support sentiment. On Sunday night, Federal Reserve Chair Jerome Powell stated that the central bank had other tools available to counteract the slowdown,

Europe

In Europe, Equities ended the week higher on hopes of an economic recovery as countries began to emerge from lock-downs, but renewed U.S.-China tensions curbed the gains. The pan-European STOXX Europe 600 Index rose 3.63%. Among major European country stock indexes, Germany’s Xetra DAX Index climbed 6.10%, France’s CAC 40 gained 4.34%, and Italy’s FTSE MIB Index added 2.79%. The UK’s FTSE 100 Index advanced 3.45% from the previous week.

Asia

Asian Equities followed their global counterparts in the same trend as Stocks in Japan posted gains for the week. The Nikkei 225 Stock Average advanced 351 points (1.8%) and closed at 20,388.16. The widely watched Japanese stock market yardstick is 13.8% lower since the start of the year. The broader large-cap TOPIX Index and the TOPIX Small Index recorded similar-sized weekly returns and have returned -14% and -15%, respectively, for the year to date. The yen was little changed versus the U.S. dollar for the week while  Chinese markets weakened on Friday, with Hong Kong’s Hang Seng Index plunging 5.6% to close 3.6% lower week on week. Mainland A-shares also fell on Friday, with the large-cap CSI 300 Index down 2.2% from the previous week.

 

Index

Friday’s Close Week’s Change % Change YTD
DJIA 24,465.16 779.74 -14.27%
S&P 500 2,955.45 91.75 -8.52%
NSE 20 Share Index 2,014.88 39.58 2.00%
NSE All Share Index 140.39 5.06 3.74%
NSE 25 Share Index 3,279.67 99.68 3.13%

Kenya

Turnover at the Nairobi Securities Exchange turned lower week on week, closing at Kes 2.4 Billion achieved against the 4.9 Billion transacted the previous week. Volumes on the market declined as well with 80.9 Million shares exchanging hands against the 145 Million shares moved the previous week.

The benchmark NSE All Share Index (NASI) increased gained 5.06 points week on week to close at 140.39, representing a 1-week gain of 3.74%, a 4-week gain of 2.06%, but an overall year-to-date loss of 15.64%. The NSE 20 Share Index gained 39.58 during the week, a 2.0% gain to close at 2014.88 basis points and the NSE25 share index similarly rose to close at 3279.67 points, 99.68 points (3.13%) higher from last week’s close.

NSE 20 share Index, one year chart performance.

The Derivatives Market closed the week with a total of 16 contracts valued at Kes.458,000. KCB contract expiring in 17th December 2020 moved 5 contracts valued at Kes.180, 000, this was lower as compared to the 33 contracts valued at Kes.1.1 Million transacted the previous week.

The secondary bond market of the NSE registered reduced activity with bonds worth Kes.10.3 Billion transacted compared to the Kes.10.7 Billion registered the previous session.