The stock market reopened Wednesday after the General Election holiday with a gain of Sh31.8 billion as preliminary results showed a tight race between opposition leader Raila Odinga and Deputy President William Ruto.

Twenty-four of the 63 listed stocks recorded gains on Wednesday while seven counters shed value as local investors continued to snap low-priced shares.

This pushed the market value to Sh2.261 trillion— the highest valuation since mid-May when shares started to fall on foreign investor flight after a jump in interest rates in developed markets such as the US.

Analysts reckon that investors had factored in the political risks associated with the General Election.

The Tuesday polls were an important test for stability in Kenya after two of the last three were marred by violence following disputes amid allegations of rigging.

The Kenya shilling, however, continued to depreciate against the dollar, trading at an average of Sh119.27 units in the afternoon after opening at Sh119.17.

Trading activity at Nairobi Securities Exchange (NSE) dipped compared to Monday, with the number of transacted shares falling 44 percent to 10.5 million.

Bonds trading was stable after recording a turnover of Sh3.63 billion compared to Monday’s Sh3.67 billion.

“We are of the view that the elections aspect is a factor but not a key consideration when participating in the NSE as seen in the market recovery since the end of June,” said Solomon Kariuki, head of research at AIB-AXYS Africa.

“Investors already priced in the electoral risks, which have also been overshadowed by the global factors.”

This year, investors had already factored in major shocks into their view of the market well before the election period, especially the Russia-Ukraine war which has prompted foreign investors to exit frontier markets.

Rate hikes in Western markets that are battling high inflation have also been a factor in the foreign investor flows, meaning that by the time the polls rolled in, the NSE was firmly a buyers’ market.

The frontrunners, Dr Ruto and Mr Odinga, were neck-and-neck based on results tabulated by media houses.

The Independent Electoral and Boundaries Commission (IEBC) said it believed that about 65 percent of the 22.1 million registered voters cast their ballots.

Turnout was nearly 80 percent in the last election in 2017. The final result from the IEBC is expected in days, although legally, it has up to a week.

In the past four trading sessions, the NSE has added Sh80.5 billion in market capitalisation—the measure of investor wealth.

The five largest stocks at the bourse have contributed 86 percent or Sh69.03 billion to these gains, which is in proportion to their overall share of investor wealth at the NSE.

Safaricom, the largest listed firm in the country, gained Sh34 billion between August 3 and yesterday after its share price rose by three percent in the period to Sh30.45.

Equity Group, the second largest listed firm, has recorded a 12 percent price gain in the period to Sh53.25, resulting in a market cap increase of Sh21.7 billion to Sh200.9 billion.

Co-operative Bank, KCB and EABL have increased their market capitalisation by Sh5.6 billion, Sh5.1 billion and Sh2.6 billion respectively in the period.

These companies have reported robust earnings and declared steady dividends in recent years, making them attractive options for investors looking to retain value on their portfolios in periods of market dips.

The defiance of poll jitters mirrors the market position that held in 2017 when the NSE gained Sh73 billion in the two weeks to the disputed polls, which led to the nullification of presidential results.

In the currency market, there has been a steady depreciation of the shilling on account of dollar demand from importers overwhelming supply.

The cost of imports has risen significantly in the past year on pent-up demand after economies were reopened from Covid-19 lockdowns, while the Russia–Ukraine war has raised the price of fuel and food.

The slide to a new all-time low of 119.27 units Wednesday brings this year’s cumulative depreciation against the dollar to 5.14 percent.

Going forward, the performance of the markets will depend on the post-election situation in the country once the winner of the presidential poll is announced formally in the coming days.

While the 2013 election results passed without incident despite a Supreme Court petition, there was widespread unrest in 2017 after a similar dispute resulted in the annulment of the presidential election results and the opposition Nasa coalition boycotted the repeat poll.

The September 1, 2017 annulment of the presidential poll by the Supreme Court shocked the market, causing prices to tumble beyond the 10 percent daily limit and resulting in a half-an-hour stop of trading.

On the day, the market shed Sh92 billion in investor wealth and 3.5 percent in its benchmark NSE 20 index, indicating the potential shocks that the NSE would face in a volatile post-election situation.