This archive report was first published on 27 April 2020.
Between January and March 2020, investors at the Nairobi Securities Exchange (NSE) lost Ksh1.31 billion due to the COVID-19 pandemic, which triggered panic selling and trading halts, according to the Capital Markets Authority (CMA) Quarterly Statistical Bulletin for Q1 2020, published on April 27, 2020.
Equities turnover at the NSE decreased by 2.91% to Ksh43.7 billion in the first three months of 2020, compared to Ksh45.01 billion traded in the three months leading to December 2019.
Market capitalisation also decreased by 7.94% to Ksh2 trillion in Q1 2020 from Ksh2.18 trillion at the end of Q4 2019.
CMA Director for Regulatory Policy and Strategy Luke Ombara attributed the slowdown to the COVID-19 pandemic, but noted that 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,' Ombara said in the bulletin. '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.'
The NSE 20-Share Index dropped by 20.7% in Q1 2020, mirroring declines in MSCI World, Emerging Markets, and Frontier Market Indices of 21.4%, 23.9%, and 27.7%, respectively.
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, closing the quarter at 1,966.12 points.
However, the bond market saw an increase in turnover, with KShs.157.98 Billion worth of bonds traded in Q1 2020, compared to KShs. 106.46 Billion traded in Q4 2019.
The poor performance of the bourse in Q1 2020 is reflected in the market capitalisation of the top 10 most valuable listed firms, with majority of them recording drops in value during the three months.
