Today's Major Market Move - Kenya Equity Markets Down 14% for the Year

With all the fireworks going off in Europe, there's been less focus on equity and bond markets in other parts of the world, including Africa. Northern African markets garnered some attention during the spring time rebellions and the Eqyptian equity markets have yet to recover from the declines suffered during the ouster of Mubarak. However there have been other notable performers in Africa this year besides Egypt: the equity market in Ghana, which is the second best performer globally at 17% (and will no doubt soon be the subject of a Major Market Move post), and the equity market in Kenya, which is unfortunately on the other end of the spectrum, down close to 14%.


The Kenyan economy is seeing a double whammy with the Kenyan Shilling experiencing significant weakening. It's down 11% since the beginning of the year, third worst globally after Uganda and Belarus (which experienced a massive devaluation that was discussed in a previous post). The positive effects of currency devaluation on exports don't appear to have kicked in yet.


An event that has been weighing heavily on the economy is the ongoing drought throughout the Horn of Africa, which not only has impacted agriculture within Kenya, but has also forced the government and relief agencies to deal with a flood of refugees from surrounding countries. From the Australian Broadcast Corporation:

Dadaab in Kenya has now the dubious honour of being home to the largest refugee camp in the world.

Every day, a thousand Somalis stream across the Kenyan border into the camp to join the 367,000 people already living there. It takes them weeks to get there, and when they arrive they are malnourished and dehydrated. The exodus is the result of drought, this has been the driest year in 60 years.

(Click on the images for a larger view.
Click here for the current performance of global equity indexes.
Click here for the current performance of exchange rates.)