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0 News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/kenyan-stock-market-faces-bearish-pressure-amid-mixed-sector-performance/
The Kenyan stock market is bracing for further declines as the NSE20 share index dropped by 0.88% on Friday, extending a downward trend that has raised concerns among investors.
The recent sell-off appears to be driven by profit-taking following a strong rally that began in October 2023. While the broader market sentiment is not overwhelmingly negative—only four out of 14 sectors are in the red—the financial sector, which dominates Kenya’s equity market, saw a 0.63% decline. This was compounded by losses in Communications (-0.29%) and Distribution Services (-2.66%).
Large-cap stocks were among the hardest hit, with Safaricom, Equity Group, East African Breweries, and KCB Group all posting significant declines. These losses overshadowed modest gains in some banking stocks, such as ABSA Bank, Co-Operative Bank, and NCBA Group, which provided limited support to the market. Analysts warn that the overall outlook remains uncertain, with a bearish bias likely to persist unless broader economic conditions improve.
Inflation Rises to 3.3%, Adding Pressure on Consumer Spending
Meanwhile, Kenya’s inflation rate climbed to 3.3% in January, up from previous levels, driven by higher food and transport costs. Food prices surged by 6.1%, while transport costs increased by 0.7%. Although inflation remains below the Central Bank of Kenya’s 5% target, the uptick could weigh on consumer spending, particularly in sectors like retail that are sensitive to price changes.
Despite the rise, inflation is expected to stay within the central bank’s target range, offering some reassurance to investors. The easing of inflationary pressures could provide a boost to the domestic equity market, but rising costs may still squeeze profitability in certain industries. In December, the Central Bank of Kenya cut its benchmark interest rate by 75 basis points to 11.25%, signaling its commitment to stimulating economic growth. This move is expected to support interest-sensitive sectors, though its impact on the broader market remains to be seen.
As Kenya navigates these economic challenges, investors are closely monitoring both inflation trends and corporate performance for signs of stability or further volatility. The coming weeks will be critical in determining whether the market can regain its footing or if the bearish momentum will continue to dominate.
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/kenyan-stock-market-faces-bearish-pressure-amid-mixed-sector-performance/
