By Daniel Wesonga

Kenyan stocks could come under pressure after the NSE20 index declined by 1.29% in the previous session. The market reacted to the fallout from the U.S. indictment of Indian billionaire Gautam Adani, which has created market uncertainty. The indictment, involving bribery allegations related to the Adani Group’s operations, led to the cancellation of a nearly USD 2 billion airport project in Kenya. President William Ruto’s suspension of the procurement process, which would have given the Adani Group control of the country’s main airport, raises concerns about foreign investments in Kenya. This is likely to dampen investor sentiment and make market participants more cautious about large-scale infrastructure projects, potentially challenging Kenya’s financial markets in the near term.

As one of the largest foreign investors in Kenya, the Adani scandal could have ripple effects, prompting global investors to reassess their exposure to emerging markets. This may result in a pullback of capital flows into emerging markets like Kenya, further weighing on market sentiment.

Meanwhile, President William Ruto remains optimistic, forecasting a 5% GDP growth for 2024 and 5.6% for 2025. This growth is supported by government efforts to support the agricultural sector, including the distribution of subsidized fertilizers to millions of farmers. These initiatives have contributed to increased crop production and lower food prices, improving food security and economic stability. In turn, this could stimulate consumption and benefit the agricultural, consumer, and retail sectors, potentially providing a counterbalance to broader market uncertainties.

• Wesonga is Senior Sales Manager at Pepperstone