Nairobi Securities Exchange #ticker:NSE (NSE) investors lost Sh15.74 billion in paper wealth on a day of demonstrations that followed opposition leader Raila Odinga’s Tuesday announcement that he had pulled out of the repeat presidential election set for October 26.
The hit on investor wealth at the Nairobi bourse — now standing at Sh2.340 trillion — came as the shilling showed resilience but was tipped to cave in to pressure as political uncertainty intensifies.
The market closed 1.41 per cent or 51.97 points lower at 3644.80 points, saddled by significant losses on blue chip counters that normally attract heavy foreign investor trading.
Investors, mainly foreigners, continued selling shares on blue chip counters that carry heavier weighting on the main indices.
Posting the highest single session loss in two weeks, the NSE All Share Index (NASI) was down 0.7 per cent to 159.8 points while the NSE 25 Share Index dropped 43.71 points to stand at 4143.75.
Banking sector stocks were down 1.1 per cent with KCB #ticker:KCB, Barclays #ticker:BBK and Equity #ticker:EQTY posting the highest declines of 3.2 per cent, 3.5 per cent and 2.1 per cent respectively.
“The equity market has been a rabbit caught in the ‘political’ headlights but today’s orderly slide is noteworthy. Certainly we are dealing with a fluid and volatile political situation and the market wants a clean political closure,” said independent analyst and Rich Management CEO Aly-Khan Satchu.
Share prices fell in 27 out of the 64 listed securities at the exchange.
Market capitalisation stood at Sh2.340 trillion at the close of business yesterday, down from Sh2.356 trillion at the close of trading on Tuesday.
While the stock market continued to feel the effect of the mounting political uncertainty, the shilling showed some level of stability.
Commercial banks quoted the currency at an average of 103.25/45 units in afternoon trading, unchanged from the closing average recorded on Tuesday.
Traders, however, tipped it to depreciate due to the mounting political uncertainty.
Kenya’s dollar-denominated 2024 sovereign bond fell by 1.2 cents on Wednesday, according to Reuters data, as the demonstrations boiled over.
In a report, Reuters estimated the fall in the bond price as the biggest daily decline since the Supreme Court annulled President Uhuru Kenyatta’s election victory last month.
Demonstrations rocked key streets of Nairobi’s central business district (CBD) for the better part of yesterday afternoon, a day after Mr Odinga withdrew from the repeat poll.
The opposition leader’s decision is projected to keep the dark clouds hanging over the Kenyan economy even longer.
In a new turn of events, the High Court on Wednesday, ordered the electoral agency to include Thirdway Alliance presidential candidate Ekuru Aukot in the October 26 repeat election.
Mr Kenyatta had Tuesday took a swipe at the opposition, insisting the October 26 polls will go on as planned and within the 60 days that the Supreme Court ordered in its September 1 ruling in line with the Constitution despite Mr Odinga’s withdrawal.
The economy has taken a hit from the prolonged electioneering period and the majority of Kenyans had hoped that a lasting political settlement would be found in the repeat election.
Analysts now say with the latest developments the uncertainty is likely to be protracted.
“Isolated protests by supporters of both the Jubilee and Nasa factions have been witnessed, signalling likely pressure points ahead of the repeat election,” said analysts at StratLink in a research note.
The bitter exchanges between the opposition and the ruling party over the past couple of months have spooked investor confidence and caused sharp drops in industrial output as well as consumption of diesel and electricity.
In taking the withdrawal decision Tuesday, Mr Odinga insisted the electoral commission has not shown willingness to make electoral changes ahead of the election.