Kenya Business Optimism Dropped in June

On Tuesday trading session, the bourse was characterized by key improvements on the indices and value of transaction.

The NSE-20 share index gained by 0.95% to close at 3668.45 points while the NSE All Share Index advanced by 0.11% to close at 140.23 points. Equity turnover and market capitalization posted similar trends with the former appreciating significantly by 79.27% to close at KES 1.162 billion and the latter garnering 0.11% to close at KES 1.989.54 trillion. Market breadth, showed a slight improvement as the number of stocks that declined -14 were outweighed by the number of stocks that advanced -25.

Kenya’s business optimism dropped in June to 59.9 from 63.9 points in May according to the latest business sentiment indicator (BSI) by Standard Chartered. The survey of 200 small and large companies in Nairobi and Mombasa cited rapid decline of orders from abroad, low production capacity and rising input prices. The gloomy report comes in the wake of a continued bear market at the Nairobi Securities Exchange as local economic uncertainties weighed in on trading and returns at the bourse which saw 2.65% of its value erased in the month.

Read: East African Cables Turnover Slumps by 27 Percent

With Brexit upshot expected to take toll in the foreseeable future, firms may remain pessimistic given the butterfly effect throughout the globe as companies as well as countries restructure their trade relations in the EU and UK.

Currency

The Kenyan Shilling recorded an improvement in performance against some peers and continued to post losses against others, resulting in a rather mixed performance during Tuesday’s trading session. Weak losses of 0.02% were reported against the USDKES which closed the day’s trading session at 101.10 (12:30pm GMT).

This may have been as a result of end month dollar demand carried forward from the previous month. On the other hand, gains of 0.25% were reported against the Sterling Pound as the currency weakened further in the global FOREX market after the Bank of England warned on Tuesday of “challenging” risks to financial stability following the Brexit vote and eased regulatory requirements on the banking sector