Bloomberg News

Kenyan Stocks Sub-Sahara’s Worst in Quarter on Growth Concern

September 30, 2011

Sept. 30 (Bloomberg) -- Kenya’s stock index fell, extending its biggest quarterly drop since 2009 and making it sub-Saharan Africa’s worst performer in the period as concern global growth is slowing curbed demand for riskier assets.

The 55-member Nairobi Stock Exchange All Share Index retreated 1.2 percent to 56.65 by 1:23 p.m. in Nairobi, the capital, taking its drop so far this quarter to 20 percent. That would be the worst quarterly performance since the three months through March 2009.

Kenya’s inflation rate rose to 17.3 percent this month as the cost of food and oil surged, the statistics agency said yesterday. The economy contracted a seasonally adjusted 4.6 percent in the second quarter, as poor rainfall hurt farm output, it said. Europe’s sovereign debt problems and a possible default by Greece are threatening global growth.

“There has been flight of capital to safer securities,” Alistair Gould, head of trading and business development at Nairobi-based Reliable Securities Ltd., said by phone today. “Our currency has experienced volatility and foreign investment in stocks is declining.”

The shilling has lost 20 percent this year against the dollar, making it the worst-performing currency worldwide, according to data compiled by Bloomberg. Price growth has exceeded the government’s 5 percent target all year, as Kenya feels the effects of the worst regional drought in 60 years, which has cut agricultural production and forced the country to boost food imports, including sugar whose retail price has more than doubled this year.

Pan Africa Insurance Ltd. dropped the most in the quarter, losing 40 percent, while Barclays Bank of Kenya Ltd. retreated 38 percent.

--Editors: Ana Monteiro, Gordon Bell

To contact the reporter on this story: Eric Ombok in Nairobi at

To contact the editor responsible for this story: Shaji Mathew at

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