High tea, coffee prices offer hope for Kenya’s recovery

The UK– the third largest single market for Kenyan exports after Uganda and Tanzania – was still in recession and shrank by a margin of 0.4 per cent in the third quarter and is only expected to emerge from recession in the fourth quarter.

The decline in UK’s gross domestic product for the sixth consecutive quarter amounts to a total contraction of 5.9 per cent and is the country’s longest continuous period of output loss since 1955 when the Statistics Office began keeping records.

The eurozone – which is Kenya second largest market as a bloc after the East African Community – recorded a marginal -0.1 per cent decline in the third quarter.

Major stock markets however are seesawing as investors position themselves for the expected recovery.

Even with all the optimism, some analysts and deal makers are not convinced that a global recovery is underway and have warned investors not to take unnecessary bets in the stock market.

“Wall Street tells you it’s the beginning of a new bull market and stocks look great. Don’t believe it. The next shockwave is about to hit,” warned Doug Fabian, a US market analyst in his regular e-mailed commentary on the surge in stocks.

Mr Vincent Ntalami, an investment manager at AIG Investments, was however more optimistic in his analysis last week.

“The global economic recovery finally seems to be taking root following a number of measures that various governments have taken to support their economies.”

The International Monetary Fund (IMF) has recently said that the US is expected to grow 1.5 per cent in the year to October 2010 while Eurozone and Japan will grow 0.3 and 1.7 per cent respectively.