Kenya’s Stock Market plunges after Supreme Court ruling

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Kenya’s stock market plunged by a ‘massive 9,71 percent’ as investors reacted to the Supreme Court’s ruling nullifying the August Presidential elections.

“Kenya’s Stock Market Plunges By A Massive 9.71 percent after Supreme Court Nullifies Presidential Elections,” Tweeted Kenya WallStreet an online platform that specializes in providing the latest and most relevant information on the Kenyan Financial Market.  

The Nairobi Securities Exchange (NSE) was forced to halt trading on Friday due to severe crash on most counters. It later resumed trading. However, the Kenyan Shilling weakened 0.44 percent against the dollar.

Reuters who had spoken to Nairobi Securities Exchange chief executive Geoffrey Odundo told Reuters.had said, “When there is a movement in the market beyond a certain limit, we have to stop trading to allow the market to process the information.”

Odundo said  shares had fallen by the 10 percent limit, which requires a halt.

Aly-Khan Satchu, a market’s analysts tweeted, “The Nairobi Securities  Exchange is a sea of red.”

Razia Khan, Chief Economist for Africa and a well-known commentator on African markets tweeted and said the reaction was focused on near term economic impact.

“Kenya market reaction is clearly focused on near-term economic impact. Will be a while longer before it’s a return to BAU.”

She further observed that, “However, the historic relevance of Kenya Supreme Court decision is very significant. It sets an important precedent for all of Africa.”

According to Exotix Capital in the short term, ‘We are likely to see the markets weakening as political tension resumes over the next two months.”

Control Risks (Kenya) Country lead Daniel Heal further observed that the coming days would likely experience sporadic localised protests.

“The upcoming period will probably be quite tense politically with sporadic localised protests mainly in opposition strongholds. Government policy and decision-making  will probably grind to a halt. The political uncertainty in the coming weeks could slow down business significantly with the knock-on negative effect on foreign investor confidence,” he says.

Heal further said investors needed to be open minded on whichever way the election would end.

“While Kenyatta is still likely to win the next election given his Jubilee party’s superior financial and campaign machinery, investors now also need to consider the implications of an Odinga presidency, including planning for his intended left-leaning policies that include higher social spending and a controversial review of land policies.”

He also termed the ruling of Kenya’s Supreme Court on 1 September to invalidate the Kenyan presidential election as ‘a ground-breaking and incredibly significant development that demonstrates the judicial independence in Kenya’.

“This is the first time in African history that a court has annulled a presidential elections in a ruling against the incumbent. This is however, not a statement on who won the elections, but a decision against the IEBC and how it conducted the presidential polls.”

Earlier in the week, Fitch Ratings had said the disputed Presidential Election would not  result in any significant deterioration in investor or economic growth.  

However,  “While it is still possible that any court decision to reject the challenge could trigger new unrest, we believe that the election will not result in any significant deterioration in investor or economic sentiment toward the country,” said Fitch in a statement.

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David Indeje

David Indeje is a writer and editor, with interests on how technology is changing journalism, government and society. He has been practicing Journalism since 2008. Environment, Agriculture Business, Health and Gender Development stories are his passion.David can be reached on: (020) 528 0222 or Email: [email protected]