NSE Stocks Hit 7-Month Low Due to Omicron Strain

Nairobi Securities Exchange (NSE) Stock value has dropped to a seven-month low on foreign investors’ sell-off of blue-chip firms. This is attributed to the recently discovered Covid-19 Omicron variant.

According to market data, investors’ paper wealth declined to 89.06 billion shillings in a week ended Monday thus pushing the market value to low levels witnessed in mid-April.

The NSE Market capitalization closed Monday on a 2.477 trillion pole with a 3.47 decline from the nearly 2.566 trillion poles a week earlier.

This decline has marked the lowest valuation of shares at the NSE since April 15 when it stood at 2.495 trillion shillings.

Analysis by AIB-AXYS Africa noted that big firms such as Safaricom, Equity, KCB, and EABL started offloading their shares weeks ago citing that the Omicron variant uncertainties globally have hastened this fall.

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The Covid-19 Omicron variant, first discovered in South Africa in Early November could become the dominant variant globally as cases continue to surge. More than 266 million cumulative cases have been reported with over 5.27 million deaths recorded so far.

Indeed, Omicron’s threat to the recovery is just the latest in a series of zigzags that the world economy has endured since the coronavirus began in March 2020.

Hopes that an ebbing pandemic would permit daily life and commerce to return to normal have been repeatedly frustrated by the virus.

In its most recent World Economic Outlook, the IMF projected global growth of 5.9% this year and 4.9% next year.

The emergence of omicron has however led to a major crash in the global stock and oil markets in late November, reflecting investors’ concerns over the effects that the new coronavirus restrictions could have on economic growth.

These concerns are additionally fueled by uncertainty regarding the new variant’s virulence and the possibility it could resist currently existing vaccines.