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Kenyan shares drop 2 pct on election ruling, shilling stable
A man stands in front of an electronic board displaying market data at the Nairobi Securities Exchange in Nairobi, Kenya, April 11, 2017. PHOTO BY REUTERS/Baz Ratner
By Duncan Miriri
04/09/2017
NAIROBI (Reuters) - Kenya's main share index of blue chip firms, the NSE-20, dropped 2 percent on Monday, extending its losses after the Supreme Court unexpectedly annulled August's presidential election, forcing a re-run.
The shilling, Kenyan shares and dollar bonds plunged on Friday after the court backed a petition brought by opposition leader Raila Odinga and declared President Uhuru Kenyatta's election victory invalid.
The shilling was broadly steady against the dollar on Monday, closing at 103.25/35 per dollar, compared with Friday's closing rate of 103.20/30.
On the stock market, which lost 92 billion shillings ($890 million) in capitalisation on Friday, the NSE-20 finished Monday's trading session at 3806.80 points.
"Sell-side pressure has spilled over into this week and the market, with just one or two exceptions, is a sea of red. I expect sell-side pressure to start to abate around the middle of the week," said Aly Khan Satchu, an independent trader and analyst.
He said the 60-day period within which the repeat election must be held would present challenges as parties trade words over the election board, which was blamed by the court for failing to adhere to the law while conducting the election.
Kenyan shares are still up more about 24 percent this year, mainly because of an emerging market rally that has spilled over into frontier markets, traders said.
Currency market traders said the shilling could start to regain ground as investors come to terms with the ruling.
"It may strengthen, all things being constant," said a senior trader at a Nairobi commercial bank.
Citing irregularities in last month's poll, the Supreme Court ordered the electoral body to hold another presidential election within 60 days of the ruling.
Kenya has a history of disputed elections. A row over the 2007 election, which Odinga also lost, was followed by weeks of ethnic bloodshed in which more than 1,200 were killed.
(Editing by Alison Williams)
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