Investors at the Nairobi Securities Exchange (NSE) lost Ksh1.31 billion between January and March 2020 as Coronavirus triggered panic selling at the bourse prompting trading halts, the Capital Markets Authority (CMA) Quarterly Statistical Bulletin for Q1 2020 shows.
The bulletin shows that equities turnover stood at Ksh43.7 billion during the first three months of 2020 compared to the Ksh45.01 billion traded in the three months leading to December 2019 representing a 2.91% decrease.
By the same token, market capitalisation (total value of all listed firms) also decreased by 7.94% to Ksh2 trillion in Q1 2020 from the Ksh2.18 trillion posed at the end of Q4 2019.
CMA Director for Regulatory Policy and Strategy Luke Ombara attributes the slow down to the Coronavirus pandemic but says various interventions by regulators have restored ‘normalcy’ at the bourse.
“The quarter under review was overshadowed by global socioeconomic shocks triggered by the COVID-19 pandemic. Kenya was no exception to the ensuing financial contagion, with the first announcement of COVID-19 cases resulting in the NSE 20-share index shedding over 5%, prompting a market halt, sparked-off by panic selling in an already bearish market,” Ombara says in the bulletin.
“The 20.7% drop in the NSE20-Share Index witnessed in the quarter mirrored the corresponding declines in MSCI World, Emerging Markets and Frontier Market Indices of 21.4%, 23.9% and 27.7%, albeit at a lower rate,” adds the Regulatory Policy Director.
Key market perfomance indicators also showed that trading was experiencing leaner times with both the NSE 20 Index and the NSE All Share Index recording drops.
The NSE All-Share Index recorded a 20.73% decrease closing Q1 2020 at 131.92 points while the NSE 20 Share Index posted a 25.93% decrease t close the quarter at 1,966.12 points .
During Q1.2020, bond market turnover increased by 48.39% with KShs.157.98 Billion worth of bonds traded compared to KShs. 106.46 Billion traded in Q4. 2019.
The poor perfomance of the bourse in the first three months of 2020 is reflected in the market capitalisation of the top 10 most valuable listed firms with majority of them recording drops in value on the trot during the three months.
For instance Safaricom, the most valuable company at NSE had a market capitalisation of Ksh1.2 trillion in January 2020, Ksh1.17 in February and Ksh1 trillion in March.
Equity Group had a market capitalisation of Ksh188 billion in January 2020, Ksh170.76 billion in February 2020 and Ksh128.12 trillion in March 2020.