Financial markets take a beating from goings-on in Kenya's political arena

A dealer monitors trading at the Nairobi Securities Exchange (File: Standard)

NAIROBI, KENYA: The Nairobi Securities Exchange (NSE) lost Sh20 billion paper value on Monday as it struggled to shrug off the cloud of political uncertainty that has hung on the market for the most part of this year.

Market value, also known as market capitalisation, settled at Sh2.38 trillion in yesterday’s (Monday) trading compared to Sh2.41 trillion posted on Friday.

This represented a Sh20.6 billion or 0.86 per cent decline, a marginal drop from its worst performance this year.

The bourse opened the week with a total of 15 million shares valued at Sh542 million traded, up from 17.5 million shares valued at Sh361 million posted on Friday.

The NSE 20 Share Index was down 2.46 points to stand at 3797.96, while the All Share Index (NASI) ended 1.41 points lower to stand at 163.09. The NSE 25 Share Index, on the other hand, dropped 23.98 points to stand at 4278.63.

Monday was the last day for those interested in challenging the re-election of President Uhuru Kenyatta in the October 26 repeat election to file petitions at the Supreme Court.

The financial markets have taken a beating from the goings-on in the political arena in the country, having lost Sh130 billion in the two days after the August 8, Presidential poll was nullified by the Supreme Court. 

It has since been on a see-saw ever since in reaction to the political stalemate.

In yesterday’s trading, most activities were reported in the banking sector, which had shares worth Sh166 million transacted. This accounted for 30.75 per cent of the day’s traded value.

The Kenya Commercial Bank (KCB) Group moved 1.7 million shares valued at Sh70.8 million at between Sh41 and Sh42.

Equity Group Holdings was down 25 cents to Sh40 as it moved 1.6 million shares valued at Sh65 million. The other most active counter at in the banking sector was Diamond Trust Bank that moved 113,000 shares worth Sh21 million. It closed the day at Sh185.

All eyes were on Safaricom, which had 5.6 million shares valued at Sh141 million transacted at between Sh24.75 and Sh25.75, in reaction to calls by the Opposition to boycott the company’s products last week for its perceived role in bangling the August 8 presidential vote. Yesterday, however, investors seemed not to have been bothered by the boycott going by the trading price.

Safaricom accounts for 42.3 per cent of the NSE capitalisation and any changes in its shares has a direct impact on the overall health of the bourse. It is also one of the most liquid counters at the bourse, given the interest, it attracts from the foreign investors.

Last week, the firm, which is Kenya’s largest technology firm, reported that it had grown its half-year profits by 9.5 per to Sh26.2 billion in the first half of the year ended September 2017, continuing its standing as East Africa’s most profitable company.

During the period under review, the teleco defied a difficult economic environment due to the cloud of uncertainty that came with the prolonged electioneering period in the period to grow its revenue 12 per cent to Sh109.7 billion.

The firm, which is now seeking investment opportunities to expand outside Kenya, says the growth would be 21 per cent if it excludes a one-off adjustment of Sh3.4 billion it had in a similar period last year. In the six months to September 2016, the firm made Sh23.9 billion.