Kenyan shares fell more on Thursday on investors’ caution over legal challenges to Uhuru
Kenyatta’s presidential election victory last week, while the shilling held steady against the dollar.
Reuters reported that the benchmark NSE-20 share index fell by 1.6 per cent to 4,831.85 points, adding to a 1.5 per cent decline on Wednesday.
Earlier in the week the market surged by seven per cent in two sessions as investors cheered a peaceful vote outcome.
Kenya’s outgoing prime minister and the runner-up in the election, Mr. Raila Odinga, will file a petition challenging the result on Friday, his allies said on Thursday.
“People are taking profits from the rally. They are raising questions about the petition and their main concern is if it could ignite tribal violence again,” said Brenda Kithinji, an analyst at Standard Investment Bank.
Kenyatta, declared the winner in a tight race that passed largely peacefully, has been indicted for crimes against humanity by the International Criminal Court on claims that he was one of the main players behind violence after the last poll, in late 2007, that killed at least 1,200 people.
Odinga has so far refused to concede defeat and plans to ask the Supreme Court to have Kenyatta’s victory nullified on grounds of fraud.
Barclays Bank tumbled by 7.4 per cent to 16.95 shillings a share, while Kenya Power, the country’s sole electricity distributor, fell by 4.5 per cent to 19.10 shillings per share.
On the foreign exchange market, the shilling ended steady at 85.30/50 to the dollar, barely changed from Wednesday’s close of 85.25/45.
“The shilling will remain in a narrow range of 85.20-85.80 as the market waits for the outcome of election petition,” said a senior trader at one commercial bank.
The shilling has gained one per cent since the election result was announced, lifted by a return of business confidence and reduced dollar demand by importers who had accumulated long positions in the run-up to the vote.
The local currency is nearly one per cent stronger against the dollar so far this year.
Traders said the shilling will get some support from central bank interventions to mop up liquidity and the inactivity of importers.
In the debt market, the weighted average yield on 91-day Treasury bills rose to 10.097 per cent, during a primary auction on Thursday.
In the secondary debt market, bonds worth 1.25 billion shillings were traded, down from 1.39 billion shillings on Wednesday.
