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0 News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/kenyan-stocks-show-resilience-amid-rate-cuts-and-sectoral-gains/
Kenyan equities maintained an upward trajectory this week, with the NSE20 share index closing 0.44% higher on Wednesday, buoyed by strong performances in key sectors.
Consumer durables led the charge, surging by 9.79%, followed by retail trade and non-energy minerals, which advanced by 7.16% and 1.6%, respectively. The consumer services sector also posted a modest gain of 1.21%, reflecting sustained investor confidence in consumer-driven industries. However, not all sectors shared in the optimism. Commercial services, producer manufacturing, and consumer non-durables faced declines of 6.49%, 4.55%, and 2.08%, respectively, highlighting the uneven nature of the market’s recovery.
The positive momentum comes on the heels of the Central Bank of Kenya’s (CBK) decision to cut its benchmark interest rate by 50 basis points to 10.75%—the fourth consecutive reduction in recent months. This move signals the CBK’s confidence in maintaining inflation within its target range, supported by stable core inflation, low energy prices, and a steady exchange rate. January’s inflation rate stood at 3.3%, with core inflation at a modest 2%, well below the 5% target.
In addition to the rate cut, the CBK reduced the cash reserve ratio to 3.25%, a strategic move aimed at boosting liquidity and stimulating economic activity. Analysts suggest these measures could lower borrowing costs for businesses and consumers, potentially driving higher corporate earnings, particularly in sectors reliant on consumer spending.
The rate cuts and improved liquidity conditions are expected to provide a tailwind for domestic equities, reinforcing investor optimism. However, the mixed performance across sectors underscores the challenges facing Kenya’s economy, including sluggish growth in manufacturing and commercial services.
As the market looks ahead, the focus will remain on whether the CBK’s monetary policy adjustments can translate into broader economic gains. For now, the resilience of consumer-driven sectors offers a glimmer of hope, suggesting that Kenya’s stock market may continue to build on its recent gains, albeit with caution in less buoyant industries.
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/kenyan-stocks-show-resilience-amid-rate-cuts-and-sectoral-gains/
