Kenya’s equity mar­ket faces tur­bu­lent times, says Cap­i­tal Mar­kets Authority

The East African - - THE MARKET WHISPERER -

Kenya’s Cap­i­tal Mar­kets Authority has painted a neg­a­tive out­look for the stock­mar­ket in the fourth quar­ter of this year due to pro­longed po­lit­i­cal un­cer­tainty, in­ter­est rate caps and the coun­try’s ris­ing pub­lic debt, which could trig­ger a down­ward re­view of Kenya’s sovereign credit rat­ing. While a lower in­ter­est rate is ex­pected to stim­u­late ac­tiv­ity on the exchange, con­cerns among share­hold­ers over the fu­ture prof­itabil­ity of banks due to lower lend­ing rates has led to in­vestors dump­ing bank­ing stocks. Dur­ing the nine-month pe­riod to Septem­ber 30, for­eign in­vestors ex­ited the mar­ket by sell­ing shares val­ued at Ksh11.12 bil­lion ($111.2 mil­lion) com­pared with pur­chases of Ksh6.02 bil­lion ($60.2 mil­lion). The month of Septem­ber recorded the high­est level of for­eign sales at Ksh5.79 bil­lion ($57.9 mil­lion).

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