ALL countries across the globe are taking serious measures against the COVID-19 that has not only brought with it panic within the health sector, but also has driven economies to a standstill.
Both poor and rich nations have had their own share of the pandemic, forcing all of them to intensify measures to curb further damage by the deadly scourge. The outbreak of the disease in December 2019, has shaken both economic and social lives across the world.
The financial markets have been under much pressure, volatility and uncertainty have been the order of the day since the outbreak of the disease. At the end of February 2020, global equity markets were in a freefall.
African countries, like others in the world, are suffering the consequences of the outbreak. In recent years, there has been a close business relationship between African traders and Asian countries, especially China.
Most of African ordinary markets have been flooded with Chinese products. In Dar es Salaam, for example, majority traders import goods from China and Dubai.
With the outbreak of the disease and banning of flights to some potential destinations has paralysed business activities in some markets in the country.
Records from three East African countries show that East African stock exchanges have been hit by the impact of the virus by registering low turnover and market capitalisation in recent days.
The three exchange indices—Dar Stock Exchange (DSE), Nairobi Securities Exchange (NSE) and Uganda Securities Exchange (USE)— started to show plunging sign beginning second week of this month.
The exchanges also felt the contagious effect that spill-over from cross-listed stocks originated from NSE, the largest in the region.
The meltdown of NSE trading last Friday triggered a circuit breaker 30 minutes before the closing bell after investors panicked, following the annunciation of the first coronavirus case in Kenya.
Reports from Kenya showed that NSE total market capitalisation dropped by Ksh120 billion – one of the largest declines in a single day in the history of the bourse.
The value of all stocks closed at Ksh2.04 trillion, compared to Ksh2.16 trillion on Thursday. In Tanzania, DSE All Share Index (DSEI) was not spared losing 67.32 points and closing the week at 1,988.62 points.
The total market capitalisation shredded 3.27per cent and closing the week at 16.51tri/-. Also, trading on USE hit an all-time low recording a paltry Ush1.89 million in Thursday’s trading from only 10,700 shares.
The trend in the market and stock exchange show clearly that COVID- 19 has already brought negative impact to the globe. It is, therefore, crucial for all of us to take precautions and fight the virus by following all medical advice.
