NAIROBI, Kenya, Mar 13 – Kenya’s confirmation of the novel coronavirus stopped trading activity at the Nairobi Securities Exchange after the benchmark index plunged by more than 5 percent.
In a statement sent to newsrooms, the bourse says it stopped activity at 2:38 pm as provided in the NSE Equity Trading Rules requiring a temporarily stop of trading for not more than 30 minutes should the NSE 20 Share Index decrease by more than 5 percent.
“As per the provisions of Rule 9.4.1 (ii) of the NSE Equity Trading Rules, should the NSE 20 Share Index decrease by more than 5 percent at the opening session compared to its closing value or during the continuous session, compared to its opening value, the Exchange may temporarily halt trading for not more than 30 minutes.”
Gerald Muriuki, a researcher at Genghis Capital said the drop in the benchmark index could be attributed to panic-selling following the announcement of Kenya’s first case of the pandemic that has claimed more than 4,000 lives around the globe.
“According to NSE rules, a trading halt is usually effected to give investors some time to reflect and reconsider their trading positions,” Gerald Muriuki said.
Kenya’s market capitalization fell by Sh345 billion during the week to close at Sh2.04 trillion against Sh2.38 trillion last Friday.
Muriuki says this reflects panic selling across the world, caused by rising fears of the spread of the virus.
Normal market activity will resume on Monday 16, March 2020.
On Thursday, shares around the world plunged as investors showed fear of the spread of the coronavirus.
According to the BBC, the main UK index dropped more than 10 percent in its worst day since 1987.
In the US, the Dow and S&P 500 were also hit by their steepest daily falls since 1987, making the bourse suspend trading for 15 minutes.
Shares continued to fall after the break, taking cues from the slide in European markets.