On Friday morning, a landmark ruling was passed by Kenya’s six man Supreme Court. Four out of six judges ruled in favour of a petition handed forward by opposition candidate, Raila Odinga.
The petition requested the Court to annul results of the recent presidential election that Odinga and his party declared as unfair and compromised in electoral processes that eventually led to Uhuru Kenyatta securing a second term in office. Kenyatta himself, the incumbent president since 2013, accepted the Supreme Court’s ruling placing significant emphasis on retained calm and peace within Kenya’s electorate.
While the Supreme Court decision has been widely hailed by commentators as a huge score for the democratic conviction in Africa, it also came as a disruptive occurrence to Kenya markets. Mid-morning the Kenyan Stock Exchange halted trading citing a sudden movement in stocks responsive to the news.
Nairobi Securities Exchange chief executive Geoffrey Odundo told Reuters; “When there is a movement in the market beyond a certain limit, we have to stop trading to allow the market to process the information.”
A trading halt is a temporary suspension in the trading of a securities enforced by a regulatory authority. Sudden stock movements in anticipation or response to a news announcement may be interpreted to deem a halt in trading. This was the case in Kenya on Friday morning. Trading resumed soon after 10am as regulators felt that traders had become accustomed to the news. However, telecoms operator Safaricom, the biggest company by market cap, fell 4.9 percent to trade at 24,00 Kenyan shillings ($0.2328) per share, traders said.
The Supreme Court has given 60 days for the presidential elections to be re-contested. But, investors may be worried over the possibility of election violence and social upheaval in the next few weeks. While the August 8 election took place in widely peaceful and harmonious order, the disputed results may flare tensions that have occurred in previous presidential elections in the country. The Kenyan economy has been expected to sustain growth through 2017 with discipline in fiscal reforms by which administration would eventually win the August 8 election. The Supreme Court is a landmark judgment, and will set a new precedent in the country and perhaps have wider influence across the region and continent.