Nairobi bourse flat on day of media blackout

The stock market was flat and the shilling retreated against the dollar on a day the government switched off major television stations to stop live broadcast of the “swearing in” of opposition leader Raila Odinga as the people’s president.

Market data showed a remarkable shift in investor confidence only a day after Monday’s rare calm ahead of the controversial oath taking.

The money market were particularly tense, pushing the shilling down to 102.30/50 to the dollar by mid-afternoon compared to Monday’s 102.25/45 to the dollar.

The NSE 20 share index shed 12 points to close at 3727 points, reversing Monday’s gain, even as traded turnover rebounded to cross the Sh1 billion mark from Monday’s Sh287 million.

Market capitalisation was unchanged at Sh2.66 trillion.

Nasa supporters thronged Uhuru Park for the ceremony, and in a rare show, security forces kept off from the venue, averting a possible violent confrontation with opposition supporters that would have spooked markets.

Nairobi’s central businesses district (CBD), however, bore the brunt of the political tension with most shops and offices remaining closed.

Business came to a complete standstill at around 2 p.m. as opposition supporters dispersed from Uhuru Park, causing traders to hurriedly close shop for fear of attacks and looting.

Mr Odinga took the oath at about 2 p.m. in a ceremony that was without his running mate, Kalonzo Musyoka, and Nasa co-principals Moses Wetang’ula and Musalia Mudavadi.

Jubilee’s high-handedness

Media houses bore the brunt of the Jubilee government’s high-handedness with the shutdown of the country’s top TV stations NTV, KTN and Citizen to stop live transmission of the event.

Wachira Waruru, the managing director of Royal Media Services which operates Citizen, said in a statement that the shutdown of two TV stations in the company’s stable was done without any “official communication as to why this action was taken”.

Rights groups immediately condemned government action, terming it a violation of the Kenyan Constitution.

“We strongly condemn the dictatorial act of Kenya government to shut down independent media houses. This is an abhorrent act of causing fear, intimidation and harassment of Kenyan media whose freedom is fully and effectively guaranteed [by the Constitution],” the International Center for Policy and Conflict (ICPC) said.

Ndung’u Wainaina, the executive director of ICPC, said it was important to protect the right to freedom of expression.

There was, however, big relief as the day ended without any skirmishes between Nasa supporters and police. Security forces stayed away, leaving Mr Odinga and his supporters to proceed with the ceremony and leave the grounds.

The underlying tension did, however, filter through into the markets, pulling back the shilling against the dollar in a departure from the recent trends that have seen the Kenyan currency rise against the greenback.

Dollar demand

Traders said there was a slight uptick in dollar demand during early morning trading as some investors boosted their dollar positions. Currency dealers said they expect the shilling to regain its strengthening track against the dollar through the week.

Yields on Kenya’s sovereign bonds also edged up yesterday, indicating that international investors were keeping an eye on the local situation.

The 10-year Eurobond yield rose to 5.85 per cent, up from 5.84 per cent on Monday and 5.74 per cent on Friday.

The yield on the five-year tranche was up more sharply, touching 3.9 per cent yesterday from Monday’s 3.69 per cent.

At the stock market, activity picked up in terms of turnover and the number of shares traded, but the index retreated mainly due to falling prices of key bank stocks, including Equity Bank #ticker:EQTY, Co-operative Bank #ticker:COOP and Stanbic Bank #ticker:CFC.

Affect economy

Last year’s elections that were punctuated by frequent protests adversely affected the stock market, slowing down a recovery that had brought the two-year bear run that began in 2015 to an end.

Market watchers are now keen on the Nasa coalition’s next course of action and its potential effect on the economy.

Nasa has among other measures insisted on the roll-out of a civil disobedience plan that includes the boycott of products and companies it associates with the Jubilee administration.