Investors ‘not out of woods yet’
Investors at the Nairobi Securities Exchange (NSE) sold their portfolios as others continued the wait-and-see stance awaiting the commencement of the presidential election petition at the Supreme Court.
Market capitalisation dropped by 18 per cent to hit Sh2.2 trillion as investors reacted to filing of cases. This as equity turnover dropped by Sh3 billion compared to Tuesday as foreign investors continued to shy away from the bourse.
“Investors are waiting to see what will happen after the petition challenging the presidential election results submitted by the opposition leader Raila Odinga,” said Michael Mwakio of Suntra Investment Bank.
“If the results are cancelled, then it will be the beginning of another slow market,” he added.
The stock market fell Monday while the shilling weakened slightly spiking the rates of the Eurobond that expires in 2024, this after Azimio La Umoja presidential candidate Raila Odinga filed the petition to challenge presidential election results.
“The 2024 Eurobond is not yet out of the woods yet, and with the expected petition at the Supreme Court by the Azimio faction, this will add another layer of uncertainty to investors in the coming fortnight,” said chief economist at IC Asset Managers, Churchill Ogutu.
Overall, the NSE lost Sh43 billion on Monday to close at 2.23 trillion shillings and was down 18 per cent on Wednesday.
The shilling hit new lows against the dollar to trade at Sh119.75 per dollar after falling from Sh113.13 at the beginning of the year and Sh104.44 at the end of March 2020.
according to Reuters, dollar-denominated interest rates on the country’s government bonds fell as much as 2.0 cents against the dollar as of 6:18 p.m and traded at 68.5 cents to maturity in 2048.
The Independent Election Boundary Commission (IEBC) announced last week that Vice President William Root won the election with his 50.49 percent of the vote against Odinga’s 48.5 percent.
In a 72-page petition, Odinga asked the court to annul the results of the ballot for a number of reasons, including discrepancies in voter turnout and results.