Campaign podiums are loud but investors are struggling to understand what kind of policies the political parties and contestants are talking about. Investors are looking into the investment crystal ball. But many are only seeing what they don’t want to see: August general elections.
They have been in this game of wait-and-see since Covid-19 struck in 2020. All they saw was a pandemic morphing from a health crisis into an economic crisis.
Now in the middle of trying to turn the corner on the effects of a virus, the election fever is serving these investors a new uncertainty.
Too long have some investors been in the waiting room that they are willing to overlook the risk of uncertainty in policy, continuity, and election and invest.
But investors whose money was fed on by the impact of the virus are facing their own election: that of choosing between waiting further or investing now on what was left by the pandemic.
At the Nairobi Securities Exchange (NSE), some are buying stocks. Others are selling. All of them believe they are right — just like every election contestant does.
Campaign podiums are loud but investors are struggling to understand what kind of policies the political parties and contestants are talking about.
This, analysts say, is making it difficult for investors who want to make long-term investments involving a lot of money.
“No candidate has given proper policy on what they seek to do. Most of them are just talk and make declarations that are not policy-based,” said economist Tony Watima.
Genghis Capital, an investment solutions provider on investing in shares, expects key investment decisions to take a backseat as sounds of election get louder.
“We expect a slowdown in the pace of portfolio inflows into the capital markets as investors await a resolution of the entire process which will last anywhere between four to five weeks."The move, if it comes to pass, will be consistent with what has been seen with most elections since the 2007 polls.However, Genghis expects the fall to not last beyond September, with a strong rally expected from October, even though the Russia-Ukraine conflict could complicate this.The country is now essentially fully reopened and the private sector credit is picking up. Firms are hiring more and this could build up savings and disposable incomes.“These funds will find their way to the various investment vehicles within capital markets. Resultantly, a strong rally quarter four of 2022, underpinned by a […]