This archive report was first published on 21 May 2020.
On April 30, 2020, the Nairobi Securities Exchange (NSE) reported a significant decline in bond turnover, marking its lowest level for the year. The slowdown in activity was attributed to the economic uncertainty caused by the COVID-19 pandemic, which had already seen over 1,000 confirmed cases in the country.
According to market data, bond turnover stood at Sh29.3 billion in April, a substantial decrease from the Sh65.7 billion recorded in March. This decline was also reflected in equities turnover, which came in at Sh12.6 billion, down from Sh19 billion in March.
Analysts at Cytonn Investments attributed the preference for holding onto cash to the economic uncertainty caused by the pandemic. Typically, investors turn to the bonds market in times of uncertainty, seeking the security of 'isk-free' government paper with more stable returns compared to other asset classes.
As the pandemic continues to impact the economy, it remains to be seen how the bond market will recover. However, for now, the data suggests a significant slowdown in activity at the NSE.
