With COVID-19 virus disrupting global equity markets, activity at the Nairobi Securities Exchange (NSE) was down 26.8% at the end of the first six months, 2020.
The bourse posted this depressed performance due to large foreign investor outflows prompted by their need to avert risk or take out profits.
Foreigners are also fleeing from a weakening Kenya Shilling against major world currencies.
According to a report by AIB-AXYS Africa, titled Sailing Through The Storm, KCB recorded the highest net foreign investor outflows at KSh 7.02 Billion, Equity Bank (KSh 5.8 Billion), Safaricom (KSh 5.4 Billion), EABL (KSh 776 Million) and Stanbic (KSh 591 Million).
The NSE All-share index, fell 27.76% at the end of H1, 2020, thus placing the NSE among the worst-performing indices in dollar terms.
It performed worse than Kuwait’s Stock market KWSE Premier Mkt, which fell 25.55%.
Other poorly performing indices include Cyprus Stock Exchange’s General Market Index, which fell 26.20%, Mexican equities market S&P/BMV IPC which fell 27.14%, Athens Stock Exchange’s Athex Composite Share Pr which fell 27.15%, and Namibia Overall Index which declined 28.39%.
Other indices that have performed poorly during the six month period include Brazil’s benchmark Ibovespa index which is down 28.83%, Lusaka Stock Exchange Aln down 31.32%, Mauritius Stock Exchange down 32.73%, and Colombia Stock Exchange main Index COLCAP Index fell 36.34% bringing up the rear as the worst performer.
On a global scale, equities have continued to rally driven by the increased liquidity resulting from the unprecedented fiscal and monetary stimulus, economies reopening, and optimism over the discovery of a vaccine. These have increased the attractiveness of the equities market despite the rising geopolitical tensions between the US and China.
Although several markets have nearly erased their coronavirus-induced losses, several factors that accelerated their downfall remain.
These include reduced company earnings due to lower economic growth, disruption of supply chains, and the continued spread of the coronavirus.