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Markets

NSE investors lose Sh11bn as political uncertainty mounts

Nairobi Securities Exchange staff monitors electronic trade. FILE PHOTO | NMG
Nairobi Securities Exchange staff monitors electronic trade. FILE PHOTO | NMG 

Nairobi Securities Exchange (NSE) #ticker:NSE investors yesterday lost Sh11.44 billion as the cloud of political uncertainty that has persisted since the September 1 nullification of the presidential election intensified with news that electoral agency commissioner Roselyn Akombe had resigned and fled the country.

Dr Akombe’s decision to jump ship seven days to the October 26 repeat poll raised political anxiety slowing down trading at the Nairobi bourse and turning all the indices red.

Share prices fell in 16 out of the 64 listed securities at the exchange, reflecting subdued investor sentiments that are expected to persist till mid next month.

Market capitalisation stood at Sh2.295 trillion at the close of business, down from Sh2.306 trillion on Tuesday. The market closed 6.23 points lower at 3591.62 points, weighed down by significant losses on blue chip counters, which normally attract heavy foreign investor trading.

The number of shares traded rose by 8.2 million to Sh29.12 million from Tuesday’s Sh20.91 million – meaning there was little movement on share prices.

This came as the Central Bank of Kenya (CBK) reportedly sold dollars to buttress the shilling, which equally took a hit from the political uncertainty.

The NSE All Share Index (NASI) was down by 0.78 points to 156.6 points while the NSE 25 Share Index dropped 13.03 points to stand at 4080.25.

Currency takes beating

Investors, mainly foreigners, continued selling shares on blue chip counters that carry heavier weighting on the main indices. The shilling also took a beating from the dramatic political events.

Currency traders told Reuters the central bank had sold dollars in the foreign exchange market after the shilling weakened, on news that she had resigned.

Commercial banks quoted the currency at an average of 103.30/40 units in afternoon trading, compared with Tuesday’s close of 103.20/40.

“We saw a light intervention by the central bank but the pressure is there from all sectors, mainly politically driven purchases as we get closer to the election date,” Reuters quoted a trader saying in a report.

The markets reacted negatively as the election standoff pitting opposing political players deepened, consolidating concerns among business leaders.

Opposition leader Raila Odinga’s Nasa coalition, emboldened by Dr Akombe’s resignation, restated its call for mandatory electoral reforms ahead of any repeat poll even as President Uhuru Kenyatta and his deputy, William Ruto, in two of their political campaign rallies said the repeat presidential poll would go on as planned.

They spoke as IEBC chairman Wafula Chebukati rattled by Dr Akombe’s resignation read the riot act to political players in the repeat election.

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