August Data Shows Improvement in Private Sector Growth

Trading activity opened the week on a lower note as all the market indicators closed the day in the red. The NSE 20 Share index lost 16.59 points to end at 3171.28 points, while the NASI slid 4.41 points to 129.65 points.

The NSE 25 Share index dropped 64.90 points to settle at 3420.52 points. Market capitalization declined by 3.30% to KES 1866.871 billion from KES 1930.575 billion previously, whilst equity turnover decreased to KES 0.61 billion from KES 1.13 billion earlier owing to a 42.08% reduction in the volume of shares traded.

Output and job creation increased last month to put Kenya’s private sector on a higher growth path, says the latest Purchasing Managers Index (PMI) released by CfC Stanbic Bank and market research firm IHS Markit.

New orders for goods rose, showing improved business conditions, the companies said in a press statement. “The seasonally adjusted PMI inched higher in August, posting 53.5 compared to 53.3 in July. The latest reading pointed to sustained steady growth of the private sector, following a marked slowdown at the end of the second quarter,” said CfC Stanbic and Markit.

The statement noted that August’s Index, while above June’s record low of 51.5, remained weaker than the series average of 54.8. “The degree of improvement remained historically subdued,” said the statement.

Currencies

The Kenyan shilling was stable against the US dollar on Monday as demand from retail importers and manufacturers was seen being met by inflows from charities and the tourism sector. The Sterling and the Euro slightly strengthened against the shilling following positive UK economic data published since the Brexit which has started to shows signs of recovery and this is being reflected in the value of Sterling.

The change in sentiment happened just over a week ago with UK Retail Sales showing huge positive growth. Subsequent to this we have also witnessed UK GDP come in line with expectation as well as very positive UK manufacturing figures with one of the biggest monthly jumps in 25 years.

Read: Economy in Focus: Nigeria Goes into Recession, Will Africa Suffer?