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.
.
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.
.
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.
