Why the stock market crashed immediately after court decision

Economists say it is hard to predict stock prices, but it is certain that markets dislike uncertainty. Every election year, economists consider its potential outcomes and impact on the capital markets. General elections have the potential to unsettle markets, and before the August 8 polls, the Nairobi Stock Exchange (NSE) 20 share index was trading all-time high for the last 23 months. It was worst on Friday immediately after the Supreme Court decision nullifying the presidential election. Experts are now closely watching the political race after the Supreme Court Judge David Maraga directed the electoral commission to conduct a fresh presidential election within in 60 days. It is important to note that while the recognition of historical market trends during election year, this year trading at the NSE was temporarily halted because of panicky transactions. But in light of the looming polls, the fresh election stocks market tend to have more sell off.

Afterwards it shall regain in fairly predictable way. It is crucial to remember that markets are fundamentally unpredictable. Panics and manias happen from time to time. Fresh election is a new kind of phenomena. It is not a cliché to report that anything is possible. However, that doesn’t mean that we should expect financial fireworks on in this second quarter. Ndirangu Ngunjiri, Nairobi