While many Kenyans fear Thursday’s election re-run will provoke serious trouble, foreign investors are cautiously confident that the country’s debt can ride out the crisis, although they remain hesitant about local stocks. Their base scenario is that the vote can conclude largely smoothly.
However, given that Kenya’s external debt is rated B+ but trading at levels more akin to bonds with ratings two notches lower, this means assets have already adjusted to the uncertainty and any negative surprises may have less of an impact.
