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Blue chips hardest hit by foreign exits

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Capital Markets

Blue chips hardest hit by foreign exits

NSE investor
The lucrative counters on the NSE lost between eight and 13.7 percent of value in the five days. FILE PHOTO | NMG 

Share prices of blue chip firms on the Nairobi bourse were the biggest losers in five days with foreigners as net sellers in what could signal flight to safety as the number of Covid-19 cases rises.

The plunge to below 2,000 points for the Nairobi Securities Exchange (NSE) 20 Share Index on Monday came as foreign investors accounted for nearly 90 percent of the total trade for the day.

On the same day, the number of Covid-19 cases rose to 16, having more than doubled the previous day to 15 from seven in the course of the week.

Data compiled by Standard Investment Bank (SIB) showed that in terms of buying, foreigners held just more than 55 percent of the market total trading for the day, showing the net position was foreigners selling.

The blue chips lost between eight and 13.7 percent of value in the five days, ending Monday. Of the top 10 losers during the five days, seven were blue chips, including Absa Bank #ticker:ABSA, Equity #ticker:EQTY, EABL #ticker:EABL and DTB #ticker:DTK. The three non-blue chips firms in the list were Sameer #ticker:FIRE, Kapchorua #ticker:KAPC and Williamson Tea #ticker:WTK.

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The loss by blue chips pushed the indices to the lowest levels in more than a decade, analysts noted, adding this had come as the share prices fell for the eighth consecutive session.

“All the benchmark indices closed in the red with the NASI, NSE 20 and NSE 25 declining 3.6, 3.3 and 4.1 per cent, respectively. The NSE 20 retreated for the eighth consecutive session to close below the 2,000 mark, the lowest in over a decade,” said SIB.

The fall in prices also served to raise the dividend yields of several blue chips, including Absa that stood at 10.78 percent, Nation Media Group #ticker:NMG, Bamburi Cement #ticker:BAMB, Standard Chartered #ticker:SCBK and Safaricom #ticker:SCOM.

The net foreign outflows stood at Sh149 million with Safaricom leading the charge with total net outflows of Sh128 million. “Foreign investors started the week as net sellers, recording net outflows of $1.4 million. Safaricom led the selling charge with net outflows of $1.2 million,” said SIB.

With the blue chips falling, Genghis Capital recommended that investors take positions in KCB #ticker:KCB and Equity as a way to lower the cost base of their portfolios.

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What you need to know about the coronavirus right now : The Standard

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Here’s what you need to know about the coronavirus right now:

US overtakes China
There are now over half a million coronavirus cases reported across 202 countries and territories globally and the United States has overtaken China as the country with the most infections.
Of the 531,000 cases reported, over 60,000 were added in the past day, and 2,532 new deaths in 59 countries brought the total death toll to over 24,000, according to a Reuters tally at 0200 GMT on Friday.

SEE ALSO :China virus cases spike, 17 new infections reported

It has been the single most deadly day for the disease since the outbreak began, with Italy and Spain reporting over 700 deaths each. The United States, the United Kingdom, Iran and France reported over 100 fatalities each.
The United States contributed roughly one-third of newly reported cases, as testing in the country expanded, with over 17,000 cases in the past 24 hours, and 281 deaths, the highest single-day case load of any country since the outbreak began.
China, which announced plans to close its borders to foreign citizens from Saturday, reported 5 deaths and 55 cases, and said that all but two of the new cases were from outside the country.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

Cases in South and Central America surpassed 10,000 as of Thursday, with major outbreaks in Brazil, Chile and Ecuador, which are each reporting over a thousand cases.
Countries which experienced outbreaks in February or earlier are reporting higher recovery rates.

SEE ALSO :China confirms virus spreading between humans

Record US jobless claims
The number of Americans filing claims for unemployment benefits surged to a record 3.28 million last week, in the clearest evidence yet of the coronavirus’ devastating impact on the economy.
Strict measures to contain the coronavirus pandemic have brought the country to a sudden halt, unleashing a wave of layoffs that likely ended the longest employment boom in US history.
When is a bull not a bull?
When it comes in the middle of a bear.

SEE ALSO :Factbox: What we know about the new coronavirus spreading in China and beyond

The Dow Jones Industrial Average’s surge of over 20% from its coronavirus-induced recent low this week, by one definition used on Wall Street, suggests a new bull market. The surge came on hopes a $2 trillion stimulus measure would flood the country with cash in a bid to counter the economic impact of the intensifying pandemic.
But that definition should be treated with a large piece of caution. The very definition of bull market is debatable, and given the market’s volatility on news about the pandemic, some said that calling the move upwards a “bull market” was tantamount to missing the forest for the trees.
Coronavirus can get you out of jail or land you in it
While countries like Afghanistan and Canada are releasing inmates to prevent the spread of the virus in the tight confinement of prison facilities, other places are increasing punishments for flouting the rules.
Anyone claiming to have coronavirus who deliberately coughs at emergency workers’ faces being jailed for two years, Britain’s Director of Public Prosecutions said on Thursday, after recent reports of such incidents. Those responsible could face charges of common assault.

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SEE ALSO :Travelers to be screened for ‘Chinese’ coronavirus- Government

In Singapore, famous for its strict rules, anyone caught intentionally sitting less than a meter away from another person in a public place or on a fixed seat singled out not to be occupied under new, more stringent social distancing rules, can be fined up to S$10,000 ($6,990), jailed up to six months, or both.
How far is a normal bike ride?
As more countries adopt stringent lockdown policies to try to stem the spread of the virus, a debate is bubbling over what limits there should be on regular exercise.
In France, citizens have been told not to venture further than 1 km from their homes. In Israel, the guidance suggests 100 metres should be the maximum. In Britain, people are allowed to visit parks near where they live, as long as they maintain a distance of at least two meters from others.
In Belgium, a nation of cyclists, some want a limit of up to 70 km so they can get in a proper bike ride. The interior minister says that is far too much.
Soap, not guns
A deeply conservative tribal region of Pakistan is spreading an animated, Pashto-language video to warn its population about the coronavirus – and taking a shot at its gun culture in the process.
In the video protagonist Pabo “Badmash”, or Pabo the Thug, is setting out to defeat the virus. Villagers offer him a wooden bat, a pistol, a sword and even a rocket launcher.
But Pabo astounds them by refusing, saying he will defeat the enemy with his “bare hands”. He then proceeds to wash his hands with soap – and even checks to ensure he has lathered them for 20 seconds, as recommended.


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CoronavirusCOVID-19Coronavirus death toll

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Several firms are exempted from the dusk to dawn curfew

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Supermarkets, retail outlets, chemists, mobile operators, media firms, petrol stations and banks will remain open during the dusk to dawn lockdown that begun yesterday.

In a Gazette Notice No 30, dated 26th March 2020, professionals exempted from the shutdown include: medical personnel, operators in the aviation industry, utility providers, security personnel, postal and courier workers, port operators, and emergency response units.

On day one of the lock-down, ugly scenes of security personnel engaging in harassment of travellers, journalists and shops, was witnessed around the country.

Authorities have already shut down bars, open-air markets and all learning institutions as well as cancelled sporting activities such as the world famous Lewa Marathon.

Experts warn that impact of this partial shutdown could make things worse for the economy. Kenya’s first response in containing the virus has been to cancel large gatherings, — a measure already taking a toll on the hospitality industry, entertainment firms, and the sporting industry.

Our country isn’t a 24-hour economy, most business close by 9pm apart from the “nightlife”.

The curfew will affect the evening foot traffic which is always a retailer’s happy hour, and in turn affect revenues for retail as well as companies. Banks like NCBA have already moved their closing hours from 4PM to 3PM. Long term will mean less revenue generation than would have been on a normal occasion.

Felix Ochieng, a dealer at Faida Investment Bank.

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Professor Gerrishon Ikiara, an economist at University of Nairobi agrees that the curfew will negatively impact businesses.

The lockdown has the effect of cutting production and consumption, severely impacting on GDP. The level of shutdowns in economies worldwide is unprecedented and has not been seen for the last 300 years since 1820, We are in a fix between allowing free movement and curbing the spread of Covid-19.

Professor Gerrishon Ikiara in an interview with the Kenyan WallStreet

He said the partial shutdown should be managed effectively to reduce its effects on the economy while protecting the lives of Kenyans.

ALSO READ:

Kenya’s Economy Has Highest COVID-19 Risk Exposure in Africa ~ RMB

Private Sector Lobby Advisory to Firms on COVID-19 Pandemic

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KPA names new MD after Manduku’s resignation

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MOMBASA, Kenya, Mar 28 – The Kenya Ports Authority board of directors has appointed Engineer Rashid Salim as the acting Managing Director after the resignation of Dr. Daniel Manduku.

The board, which met for a whole day at the port of Mombasa during the 372nd Special Board Meeting to deliberate on Manduku’s resignation, settled on Salim, a Marine Engineer by profession.

Salim, who has worked at KPA for 38 years, took over from Manduku who resigned on Thursday, March 26, 2020.

KPA board chairperson General (Rtd) Joseph Kibwana confirmed Salim’s appointment in a letter dated March 27, 2020.

“The board sitting held during the 372nd Special Board Meeting on 27 March 2020 resolved to appoint you (Rashid Salim) as the acting Managing Director with effect from March 27, 2020. Details which will be communicated to you in due course,” wrote Kibwana.

He said the acting appointment will be subjected to the prevailing human resource policies.

Salim was KPA’s General Manager Engineering Services and prior to that position he was the Head of Marine Engineering.

According to his resume, he was employed at KPA on September 1, 1982, as a Marine Engineer Trainee and has risen through the ranks to Marine Engineer, Senior Marine Engineer, Principal Marine Engineer (Dockyard), and Principal Marine Engineer (Afloat).

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He holds a Higher National Diploma in Marine Engineering UK, Chief Engineer Certificate of Competency South Tyneside College in the UK, among other engineering qualifications.

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Manduku announced his resignation on Friday, through a letter to the board.

“I do hereby tender my resignation, which I hope you will accept, effective 1st June 2020. I am immediately proceeding on terminal leave until then,” he said in the letter dated March 27.

Manduku, who is under investigation for corruption was earlier this month arrested by detectives from the Directorate of Criminal Investigations (DCI), but did not face charges because the chief public prosecutor had not approved his file.

Manduku was appointed to the helm of the port on May 31, 2018, to replace Catherine Mturi-Wairi.

Prior to the appointment, Manduku was the Chief Executive Officer of the National Construction Authority (NCA).

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