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Kenyan shilling volatile after court nullifies presidential elections| Coastweek

NAIROBI (Xinhua) -- Supporters of the opposition presidential candidate Raila Odinga celebrate after Supreme Court declared the August 08 presidential election null and void, in Nairobi, Kenya, Sept. 1, 2017. Kenya’s Supreme Court on Friday declared the August 08 presidential election null and void and ordered a repeat of similar exercise within 60 days. Chief Justice and President of Supreme Court David Maraga said the election where the incumbent Uhuru Kenyatta was declared the winner had gross irregularities which affected the integrity of elections. XINHUA PHOTO - CHEN CHENG

Kenya shilling 'volatile' after Court nullifies Presidential elections

by Bedah Mengo NAIROBI(Xinhua) -- The Kenyan shilling is facing volatility after the Supreme Court nullified the win of President Uhuru Kenyatta in Aug. 8 polls.

The court agreed with Kenyatta’s main challenger Raila Odinga, who argued that the elections were not free and fair, and called for a repeat of polls within 60 days.

The currency had begun Friday trading at an average of 103 percent after strengthening by 0.04 percent on Thursday.

In the early morning trading, the shilling had even strengthened to 102.8 against the dollar, according to the Central Bank of Kenya.

However, after the court ruling, commercial banks quoted the local currency at between 103.20 and 103.40 against the dollar.

Traders at the financial institutions blamed the volatility the shilling faced on panicky investors who put pressure on the currency.

Analysts at Cytonn, a Nairobi-based investment firm, had noted that the outcome of the election petition would play a role in determining the performance of the shilling in the short-term.

However, according to them, whatever the direction the shilling takes, they expect the forex exchange reserves level, currently at 7.5 billion dollars, an equivalent of 4.96 months of import cover, to support the currency.

They noted the level would be maintained by expected inflows from tourism, tea and horticulture exports and Diaspora remittances.
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UPDATE:

Kenya Bourse turnover rises amid worst fall of key indices

by Bedah Mengo NAIROBI (Xinhua) -- Equity turnover at the Nairobi Securities Exchange (NSE) rose 142 percent Friday as panicky investors offloaded their shares following the nullification of President Uhuru Kenyatta’s win in Aug. 8 polls.

Turnover increased from 6.7 million U.S. dollars on a volume of 24 million shares from previous session to 16 million dollars from 60 million shares, with investors mainly disposing mobile phone firm, Safaricom.

Amid the surge, however, the bourse recorded one of its worst days as various stocks and major indices plunged.

The NSE 20 Share Index was down 139.84 points to close at 3,887.28 points while the NSE All Share Index (NASI) fell 6.25 points to close at 162.91 points.

All the large stocks that make the 20 Share Index declined by between 1 and 9 percent. Among the stocks that plunged were Safaricom by 5 percent, KenGen 7 percent, Kenya Power 9.7 percent, and Equity Bank 6.3 percent.

The most traded counters were Safaricom, Equity, Kenya Commercial Bank, Barclays and Housing Finance, moving 44.5 million, 5.1 million, 2.2 million, 2.1 million, and 1.1 mil­lion shares respectively.

Market capitalization, which measures investors’ wealth, declined by nearly 1 billion dollars, from 24 billion dollars to 23 billion dollars.

Some 485 million dollars was lost in about 10 minutes following the ruling, prompting the bourse to stop trading. Trading resumed 30 minutes later.
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EARLIER REPORT:

Kenya’s bourse halts trading as stocks plunge after Supreme Court verdict

by Bedah Mengo NAIROBI (Xinhua) -- Nairobi Securities Exchange (NSE) on Friday temporarily halted trading after key indices plunged following the annulment of President Uhuru Kenyatta’s election win.

The Supreme Court on Friday nullified the Aug. 8 election after agreeing with Opposition leader Raila Odinga that polls were not free and fair.

The court ordered new elections in 60 days, with the ruling having caught investors at the stock market off-guard.

The market lost 485 million U.S. dollars in about 10 minutes following the ruling as market capitalization, which measures investors wealth, declined from its previous value of 24 billion dollars.

Several stocks plunged after the 11.30 a.m. ruling.

Among them were Safaricom by 5 percent, KenGen 7 percent, Kenya Power 9.7 percent and Equity Bank 6.3 percent.

The NSE All Share Index, on the other hand, plunged by a massive 9.7 percent after the Supreme Court ruling.

"In line with trading rule, we halted trading from 12.30 p.m. to 1 p.m. as the NSE 20 Share index performance decreased by over 5 percent," said the NSE.

Similarly, the NSE 20 Share Index dropped marginally by 0.21 dollars while the NSE 25 share index declined 7.5 percent.

Trading, however, resumed at about 1 p.m.

"In the short term, we are likely to see the markets weakening as political tension resumes over the next two months," analysts at Exotix Capital said.

             

 

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