Foreign Investors Are Worried About Kenya’s Economy And It’s Because of Nigeria

Devaluation of the naira could prompt investor flows into Nigerian stocks at the expense of Kenyan holdings, Renaissance Capital’s Global Chief Economist Charles Robertson said in a telephone interview on June 16.

Nigeria had underperformed the four stock exchanges with the most actively traded stocks on the continent (outside of South Africa) up until June 16. Since then the Nigerian Stock Exchange AllShare Index has recovered to post a 2.72 percent gain for the year to June 21, compared with a 8.44 percent increase for the Moroccan MADEX Index, 3.5 percent for the Egyptian 30 Index and 0.46 percent for Kenya’s Nairobi Stock Exchange All-Share Index.

Over coming years Kenyan equities could have the most to lose now that Nigeria has devalued its currency, said Robertson.