Bearish sentiment protracts

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Bearish sentiment protracts continues being the dominant theme in the Kenyan equities markets as uncertainty clouds economic and business recovery from the effects of the ongoing global Covid-19 pandemic. On a year-to-date (YTD) basis, the Nairobi Securities Exchange 20-Share Index (NSE-20) and Nairobi Securities Exchange All Share Index (NASI) have posted negative returns of 24.2% and 14.1%, respectively. Notable out-performers YTD are Barclays ETF Gold (+22.1%), a security whose value is pegged on the value of gold (a safe haven asset); Kenya Airways (+39.5%) on a recent price rally; and Carbacid Investments (+12.0%). On month-to-date basis (MTD), there have been outstanding outperformers (Flame Tree Group 56.4%, Britam +47.3% and Kenya Power +30.9%). The key index counters, in particular in the banking sector, have retreated sharply, with Equity Group and KCB Group down 34.9% and 35.2% YTD, respectively.  Also Read: Africa’s four MEGA TRENDS that are overcoming the global pandemic The bearish market coupled with uncertainty around resolution of the Covid-19 pandemic, has shifted investors’ risk appetite with the accumulation and price rally of the safe haven asset in global markets, gold, recently trading close to its five-year high level (USD 1,721/ounce).   At the local bourse, the Barclays NewGold ETF is the best performer up 22.1% this year.

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