Bearish sentiment overhangs equities market

Bearish sentiment was the overarching theme in the Kenya equities markets, due to the effects of the Covid-19 pandemic that has made the possibility of a global recession closer to reality. On a year-to-date (YTD) basis, the NSE-20 and NASI have posted negative returns of 24.1% and 15.6%, respectively. Notable out-performers YTD are Barclays ETF Gold (+23.7% YTD), a security whose value is pegged on the value of gold (a safe haven asset), Kenya Airways (+53.7% YTD) on a recent price rally, and Uchumi Supermarkets (+6.9% YTD). All other stocks at the NSE are in the red zone YTD, save for WPP ScanGroup that is at break even. The bearish market, the ensuing global economic recession coupled with uncertainty around resolution of the Covid-19 pandemic, has shifted investors’ risk appetite to safer assets with the price of the Barclays NewGold ETF rising by about 23.7% this year, following accumulation of the safe haven asset in the global markets, recently trading close to its 5-year high (USD 1,720/ounce). Additionally, and despite the pandemic, geopolitical risks are worsening especially trade tensions between the world’s two largest economies which could protract global economic recovery.  With these issues on the table, there is a