Uhuru’s Re-election Good for Business as Stock Market Hits 14-Month High

August 15, 2017

The Nairobi Securities Exchange index has risen nearly seven per cent to a 14-month high as investors welcomed President Uhuru’s reelection.

The NSE-20 index rose 2.51 per cent on Monday after calm returned to several parts of the country following protests against the outcome of the General Election.

The market was also throughout last week negatively affected by the political uncertainty facing the country.

Aly Khan Satchu, an independent trader, and analyst in Nairobi said the market worried that Raila, who identifies himself as a social democrat, would have changed the economy’s course.

“The markets were concerned around a leftist ‘Magufuli’-like tilt which would have eroded Kenya’s hard won free market credentials. So part of this rally is a relief rally,” he told Reuters.

On Monday, the Kenyan shilling firmed to touch an intra-day high of 103.65 per dollar, from 104 before the election, while Kenyan dollar bonds have also rallied after the election.

Ken Minjire, the head of securities at Genghis Capital, said investors had been encouraged by endorsements of the election by various foreign observer groups.

“The international investors are more or less confident,” he said.

The Business Daily reports that NSE recorded an improved 1,161 deals on Friday, up from 843 on Thursday. Investors traded a total of 48 million shares, compared to the previous day’s 8.35 million.

Turnover at the bourse stood at Sh1.41 billion by close of trading on Friday, a large increase from Sh207.2 million on Thursday, and Sh166.6 million on Wednesday.

“This means there is a tonne of liquidity that is set to enter the market and underpin valuations,” Satchu added.

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