Investors gained Sh42.1 billion in paper wealth in the highest daily gain at the Nairobi Securities Exchange (NSE) in three weeks as markets welcomed the Supreme Court ruling upholding the win by Deputy President William Ruto as the fifth president of the Republic of Kenya.
According to Business Daily Africa, market capitalisation jumped to Sh2.192 trillion from Friday’s close of Sh2.15 trillion while Kenya’s Eurobond yields trended lower from 15.1 per cent on Friday to 13.84 per cent on the 10-year 2024 bond.
This was despite a US Labour day holiday that meant thin volumes, pointing to confidence in the markets that may allow companies to loosen their purse strings and put back money into the economy as economic uncertainties clear.
In 2017, Kenya’s stock market crashed following the Supreme Court’s decision to annul the 2017 presidential election results and investors were worried that a similar verdict would hurt investments.
The Supreme Court on Monday upheld the election of President-elect Ruto dismissing seven petitions challenging his victory in the August 9 General Election.
Seven judges of the apex court threw out the cases in a unanimous decision stating that Dr Ruto and his running mate Rigathi Gachagua were validly elected.
“As a consequence, we declare the election of 1st respondent (Dr Ruto) as President-elect to be valid under Article 140(3) of the Constitution,” Chief Justice Martha Koome said.
Businesses welcomed the ruling, which is expected to lift the economic stasis that has slowed activity in the country since the August 8 General election over the uncertainty of the court outcome.
East Africa’s biggest economy, which has a history of disputed polls weighing heavily on the economy, has demonstrated political maturity and fidelity to the rule of law that is set to boost investor confidence.
Focus economic analysts estimated the country might dodge historical polls hangover to record a five per cent growth, the highest in an election year since the return of the multi-party political system more than 30 years ago.
Expansion in Kenya’s economic activity has a history of slowing down in election years since the return of multi-party democracy.
Analysis of growth trends since 1992 shows the momentum in economic activities softened 2.83 per cent on average in election years and recovered by an average of 2.08 percent in the year after the election fever.
The Kenya Kwanza administration faces the uphill task of delivering poll promises on jobs, cost of living, economic reforms, infrastructure and housing.
Dr Ruto has promised interest-free loans, multimillion-shilling stimulus programmes, housing, infrastructure, agricultural reform, completion of stalled projects as well as clearing pending bills.
The President-elect pledged to retain President Kenyatta’s subsidy programme in his manifesto but set up a legal framework to ring-fence the Fuel Stabilisation Fund used to pay oil marketers to keep prices low.
Source: Business Daily Africa