The Nairobi Stock Exchange (NSE) on Tuesday defied the political uncertainty following the rejection of the presidential election results by the opposition that split the electoral commission and signalled a Supreme Court battle.
The NSE gained Sh2.7 billion to close trading at Sh2.294 trillion on a day a third of stocks edged upward, with a similar share recording price drops.
The number of deals rose to 1,068 from 978 while 7.4 million shares exchanged hands compared to nine million on Tuesday.
Tuesday’s trading happened before Deputy President William Ruto was declared President-elect amid chaotic scenes and rejection of the results by four commissioners of the election agency.
It could be weeks before a new President is sworn in after Mr Odinga promised to challenge the results legally, spurring fears of unrest against a backdrop of soaring food prices and high levels of public debt.
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Analysts had forecast a sell-off of shares that was expected to pull down the NSE to new lows.
The resilience of the Nairobi bourse was tied to the increased participation of local investors following the exit of foreign investors from mid-May.
“There was a temporary dead cat bounce, reflecting the optimism among the investors,” said Kevin Ngige, an equities trader at Genghis Capital, adding local investors continue to offer the bourse support.
A dead cat bounce is a temporary recovery of asset prices from a prolonged decline or bear market.
Mr Odinga dismissed as a “travesty” the results of the August 9 presidential election and warned of a long legal crisis facing Kenya’s democracy.
The dramatic series of events has raised fears of uncertainty similar to what followed disputed polls in 2007 and again in 2017.
Mr Odinga’s address came after the market had closed.
Minutes before Mr Odinga spoke, four of seven electoral commissioners who refused to approve Monday’s results, held a press conference to give their reasons.
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They accused Mr Chebukati of side-lining them and of announcing results that were full of “mathematical absurdity and defied logic”.
The National Security Advisory Committee had earlier in the morning issued an update that the country was secure and peaceful after the just concluded elections.
Overnight, Mr Odinga’s supporters battled police and burned tyres in Kisumu and Nairobi’s Kibera slum, but calm had returned to the streets by Tuesday morning.
Twenty-one shares gained out of the 63 NSE counters on Tuesday, even as 21 shares lost while an equal number remained unchanged.
During trading at the bourse, there was a slight drop in prices of large stocks such as Safaricom, KCB Group, Cooperative Bank and East Africa Breweries Limited (EABL), which often drive the NSE, leading to the flat market capitalisation.
The four stocks — which are favoured by foreign investors — shed Sh3 billion cumulatively, with growth coming from stocks like Britam, Total and Sasini.
ALSO READ: Stock market gains Sh32bn amid tight presidential race
In the three days leading up to the Tuesday poll day, the stock market gained an average of Sh16 billion per session, as it shrugged off concerns that there might be jitters normally associated with tightly contested elections in Kenya.
Local investors have been buying at a time when their foreign counterparts are selling and shifting capital to western markets where rates have been raised in a bid to counter higher inflation.
Last week, foreign investors drew Sh514.14 million in net outflows from the NSE, adding to the Sh763.98 million in net outflows recorded the previous week.