Asset Class Update: Short-Term Weakness, Long-Term Potential

The 12 months to November 2011 have been torrid for Kenyan financial assets. Trading at 3,252 at one point on November 28, the Nairobi Stock Exchange-20 (NSE-20) index has shed over 30% since reaching a post global financial crisis high of 4,706 in late October 2010. Yields on government debt meanwhile have spiked sharply higher implying significant losses for holders as bond prices have slumped. And although the shilling has seen a sharp recovery in recent weeks, the unit remains some 11% below where it was trading 12 months ago.

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