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Kenya Elections: Gain for Uganda Stock Market

“The markets have already priced in post elections development and given that so far the electoral process has gone fairly well, markets will bounce back. It is only temporary,” said Steven Kaboyo, the Managing Director Alpha Capital Partners.


The lengthy vote counting process in Kenya is making the whole election period longer than it has been expected and hoped before, and this is influencing the activities in the financial markets.

The business community in the region as a whole has been waiting for the end to the period, hopeful for a peaceful end, but some sectors had already cut down or restructured their activities.

Ugandan importers for example, amidst a decline in business activities opted to increasingly import through Tanzania instead of Kenya as they wait for certainty to return on the norther corridor. The case if different from the stock market according to experts.

In Kenya, the Nairobi stock market reopened on Wednesday after the General Election holiday and made a gain of 31.8 billion (about 1 trillion Uganda shillings) and the vote tallying process showed a tighter race between William Ruto and Raila Odinga.  

Market analysts attribute this development to the fact that as investors wait for a clearer picture, they have to put money in a safer place like the stock market. 

They say the election is not expected to adversely affect the recovery of the stock market since the effects of the Russian war on Ukraine.

The initial months of the war had seen offshore investors relocate their assets from emerging markets like East Africa to their home countries, continuing the trend that developed with the outbreak of COVID-19. This stability in the capital market has also seen the Kenya shilling-US dollar exchange rate remain stable.

“It is quiet markets in Kenya as the country and region awaits the election results with the unit maintaining trading within the 119.00-125.00 trading range,” says Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda.

In Uganda the shilling also gained some strength despite limited Bank of Uganda intervention in the market. During the week, it appreciating sharply from the weeks opening of 3875/3885 to open Friday’s session at 3785/3795 levels.

Absa Bank attributed this also to inflows from offshores investors on top of NGOs, commodity exporters and interbank flows, while there was limited corporate demand this week in comparison to the previous week. This as corporates prepare to remit mid-month taxes while awaiting Kenya election outcome. The US dollar is anticipated to trade within the 3750 – 3830 trading range in the short term.  

The experts say also expected that the Kenya situation is a short-term development and the private sector investments should not encounter long-term effects. 

“The markets have already priced in post elections development and given that so far the electoral process has gone fairly well, markets will bounce back. It is only temporary,” said Steven Kaboyo, the Managing Director Alpha Capital Partners. 

On why the election is having an impact on importers, transporters and other sectors, Kaboyo says these mainly short term business activities.

“Imports are time bound, my expectation is that by next week, the supply route (through Kenya) will be open unless there is total disruption,” he says. For now, some experts think the Kenyan situation has also helped the Uganda stock market rip the benefits, with more investors opting for the Uganda Securities Exchange, USE.

“While Kenyans wait for results from the elections, they have decided to go on a stock buying spree, adding over 500 million dollars of shareholder value, and also making the Uganda exchange the best performer on Wednesday,” said MoneyInAfrica, and investment information hub in Africa.

Uganda’s capital market made a value gain of 2.98 percent followed by Kenya with 2.56. However, Tanzania registered a decline of 0.36 percent.

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