Kenya’s main stock index rose 2.51 per cent on Monday to a 14-month high, building on gains last week as investors welcomed the re-election of President Uhuru Kenyatta.
The NSE-20 index has risen nearly 7 per cent since the election last week’s Tuesday. Kenyatta was declared winner by a clear margin on Friday but his main challenger, Raila Odinga, has not yet conceded.
At least 24 people have been killed in pockets of protests against the outcome of the vote, mainly in two Nairobi slums. But businesses re-opened on Monday, shrugging off a boycott call by Odinga.
A dispute after an election in 2007, which Odinga also lost, sparked widescale protests and violence that killed 1,200 people and hammered the economy.
Aly Khan Satchu, an independent trader and analyst in Nairobi, said the market worried that Odinga, who identifies himself as a social democrat, would have changed the economy’s course.
“The markets were concerned around a leftist ‘Magufuli’-like tilt which would have eroded Kenya’s hard won free market credentials. So part of this rally is a relief rally,” he told Reuters, referring to President John Magufuli of neighbouring Tanzania.
Kenyatta, the 55-year-old son of the country’s founding president, engaged regularly with the business community in his first term to try to boost economic growth and job creation. His family also owns a range of businesses.
The Kenyan shilling firmed on Monday to touch an intra-day high of 103.65 per dollar, from 104 before the election, while Kenyan dollar bonds have also rallied after the election.
Monday’s gains by the blue chip index were led by electricity distributor Kenya Power, which was up 9 per cent and lender KCB Group, which was up 8 percent.
Ken Minjire, the head of securities at Genghis Capital, said investors had been encouraged by endorsements of the election by various foreign observer groups. The main local observer group also said the official result was in line with their tally.
“The international investors are more or less confident,” he said.
Kenyan shares had slightly lagged this year’s gains in other African bourses like Nigeria as investors waited to see how the election would go, market participants said.
“This means there is a tonne of liquidity that is set to enter the market and underpin valuations,” Satchu said.