By JAMES ANYANZWA

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Regional stockmarkets defied a post-election dispute in Kenya that had followed a week-long tallying of votes.

The markets trading remained normal despite the controversy within Kenya’s Independent Electoral and Boundaries Commission (IEBC) after it declared William Ruto president-elect on Monday.

Before the announcement, foreign investors were on a selling spree on the Nairobi Securities Exchange (NSE), disposing of a total Ksh502.2 million ($4.2 million) worth of shares in four days (from election day on August 8 to the day of announcement, excluding weekends), according to data from the NSE.

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However, the trend reversed on August 16 when foreigners turned net buyers by acquiring shares valued at Sh25.79 million ($216,722.68) on the NSE, in one day.

Market regulators, however, expressed fears that the looming Supreme Court battle over the disputed presidential poll presents a downside risk to the upward momentum. The market is still reeling from the effects of the Covid-19 pandemic, Russia-Ukraine war and the rise in interest rates in the developed economies.

A day after the announcement, Ruto’s main opponent Raila Odinga said he was rejecting results as the tally did not follow procedure for verification. The markets initially ignored that, even as Odinga suggested he would head to the Supreme Court to challenge Ruto’s victory. He has until Monday to file the petition, after which the Court will have 14 days to decide on the case. Stability, however, lies in the fact that incumbent President Uhuru Kenyatta remains in charge until a new leader is sworn in.

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Seal of approval

“There was a slight appreciation of the market in terms of valuation which is an indicator that investors are still very confident about the Kenyan market,” said Geoffrey Odundo, CEO of the NSE.

“We think that given that we have a very well defined resolution mechanism of this event (Presidential poll dispute) investors take a view that it will take its normal course and they have to continue investing in the country. So I think the investors are positive about this.”

“Kenya is fundamentally one of the best in Africa and ranks up there among people looking to invest in a frontier market. So, irrespective of the political situation, the market will be as resilient as it is right now and hope to see greater volumes as we clear this process.”

During polling counting period, equity turnover on the NSE declined by 49 percent to Ksh222.34 million ($1.86 million) on August 15 from Ksh438.65 million ($3.68 million) on August 8 while the volume of shares traded fell by 52 percent to 9.08 million from 19.06 million in the same period.

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However, the value of listed stocks (market capitalisation) increased by three percent to Ksh2.29 trillion ($19.24 billion) from Ksh2.22 trillion ($18.65 billion) while turnover in the bond market declined 80 percent to Ksh710 million ($5.96 million) from Ksh3.63 billion ($30.5 million).

After the declaration of Ruto as president-elect on August 15, equity turnover on the NSE fell 12 percent to Ksh194.77 million ($1.63 million) in August 16 from Ksh222.34 million ($1.86 million) in August 15 while the volume of shares traded declined by 18 percent to 7.45 million shares from 9.08 million shares in the same period.

Market capitalisation, however, rose slightly by 0.13 percent to Ksh2.294 trillion ($19.27 billion) from Ksh2.291 trillion ($19.25 billion) while bond turnover more than tripled to Ksh2.31 billion ($19.41 million) from Ksh710 million ($5.96 million).

Regionally, the impact of Kenya’s unfolding political developments on the Rwanda Stock Exchange (RSE), Uganda Securities Exchange and Dar es Salaam Stock Exchange (DSE) is yet to be felt as investors digest implications of the poll results and subsequent court battles.

“We have not had any issue. The market did not react to the polls. We continued to have good earnings from listed companies with positive outlook especially with the resumption of activities after the Covid-19 pandemic, “said RSE chief executive Celestin Rwabukumba.

Equity turnover on the DSE increased by more than elevenfold to Tsh1.26 billion ($538,171) on August 16 from Tsh110.15 million ($47,047.3) on August 15 while total market capitalisation declined marginally by 0.14 percent to Tsh16.029 trillion ($6.84 billion) from Tsh16.048 trillion ($6.85 billion) in the same period, DSE’s daily market data report showed.

The All Share Index (DSEI) declined by 0.11 percent to 1,923.37 on August 16 from 1925.64 on August 15.