Kenya's stock market has suffered significant losses, making it the worst performing globally. The weak performance can be attributed to various factors, including sovereign risk, political instability, economic factors such as US interest rates and the weakening Kenyan shilling, and the burden of public debt. The Central Bank of Kenya's decision to restrict money supply and the enactment of new taxes have also contributed to the decline. To reverse the trend, experts suggest diversifying and growing the economy, investing in human capital, boosting entrepreneurial orientation, and improving governance and accountability. Long-term strategies are seen as crucial for improving the stock market's performance.
In the global context, the stock markets experienced mixed finishes and fluctuations in the past week. Asian markets, including South Korea, Hong Kong, Shanghai, and Australia, saw gains following Wall Street's best week in almost a year. However, concerns were raised about weakness in the Japanese services sector. US stocks also ticked up after a rosy end to the week, with the S&P 500 and Nasdaq Composite Index both showing gains. The bond market's movements, particularly the rise in the yield on the 10-year Treasury, have been influential in the stock market's fluctuations. The upcoming week is expected to have fewer major events that could impact financial markets. Loan officers at banks have been tightening their lending standards due to a less favorable economic outlook. Oil prices rose after Saudi Arabia and Russia reaffirmed their commitment to maintaining oil supply cuts. The Oman stock market saw a volatile week amid global and regional uncertainties. The market rebounded to a certain extent but ended with a price correction. Geopolitical tensions in the region pose a risk. The value and volumes traded on the stock exchange have declined for the second week. The financial sector performed well, while the services and industrial sectors fell. Banks could remain a focus for investors due to high interest rates. Traders are monitoring the Federal Reserve's comments and upcoming interventions. Oil prices continued to slide, adding downside risks to the stock market.
In other African markets, Zambia's bondholders are set to vote on a $3 billion restructuring deal. Uganda's central bank has announced its benchmark lending rate decision. Asian share markets weakened as U.S. manufacturing activity weakened. Oil prices eased amid a cautious demand outlook. South Africa's rand, stocks, and bonds gained on coalition deal prospects. Kenya's shilling remained steady supported by hard-currency inflows. South Korea plans to cooperate with African nations for critical minerals supply. Britain plans to deport asylum seekers to Rwanda. Nigeria's main labor unions have begun an indefinite strike over minimum wage. Somalia threatens to expel Ethiopian troops over a disputed port deal. Nigeria's central bank has revoked the banking license of Heritage Bank. Tanzania and Ethiopia have signed loan accords with South Korea for access to Africa's mineral resources. Ethiopia's Prime Minister Abiy Ahmed will address pressing questions from Ethiopian lawmakers, potentially influencing local investor confidence. Simultaneously, Tanzania's central bank's lending rate decision is key for local borrowing costs and economic activity. Protests continue in Kenya, indicating ongoing political instability that may deter foreign investments. Asian stocks hit 27-month highs due to softer US economic data reducing chances of a September rate hike, boosting bonds and commodities while weakening the dollar. Oil prices dropped in Asian markets, anticipating lower demand following weak US employment and business data, hinting at a cooling US economy. South African assets rose on optimism about potential US rate cuts. The Kenyan shilling slightly strengthened from hard currency inflows from tea exporters and diaspora remittances, despite national protests. In Niger, the junta's agreement to hold talks with Benin aims to restore relations after a coup affected a China-backed oil pipeline. The IMF disbursed $224.7 million to Congo, marking significant financial support following its loan program review.