Nairobi Securities Exchange (NSE) stocks posted the largest weekly loss since the start of the year as investors reacted to fresh lockdown and longer curfew hours introduced to stem the spread of Covid-19 infections.
The market capitalisation reduced by Sh89.38 billion, closing Thursday trading at Sh2.468 trillion as Safaricom, East Africa Breweries Limited (EABL) and the big banks led in shedding value.
Safaricom, Equity, EABL and Cooperative Bank shares -- which account for 77.6 per cent of total NSE wealth -- fell by between 4.4 per cent and 12.1 per cent, collectively losing by Sh92.86 billion.
The fall in share prices was in line with analysts' expectation that investors were going to price in implications of stiff Covid-19 control measures on the outlook of sectors such as banking, manufacturing, hospitality, transport and communication.
NSE was on an upward trend, having hit a 15-month high of Sh2.598 trillion on March 23, but the roll-out of State restrictions hurt prospects of various sectors, dimming appetite for stocks.
Head of research at Genghis Capital Churchill Ogutu last week said the return of strict Covid-19 controls in the absence of any stimulus package such as tax cuts to soften the hit on businesses will see large stocks take a beating as foreign investors exit.
"The open-ended nature of these restrictions raised the layer of uncertainty for investors. We also haven't seen any fiscal measures accompanying these restrictions to help absorb the shock and this makes the outlook bleaker," Mr Ogutu said.
The market was basking in the excitement of dividend payouts as firms upped their optimism in the economy.
Safaricom, KCB, Co-op, Stanbic and Stanchart had a combined Sh32.53 billion dividends, with that of banks coming in six trading sessions to the day the State rolled out the tough measures.
President Kenyatta on Thursday ruled out tax reliefs for workers and businesses when he enforced new Covid-19 restrictions that will cause to job losses and depress earnings.