Kenya's Stock Market Plummets, Hurting Citizens' Savings and Companies' Fundraising
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Kenya's stock market has suffered sharp losses recently, making it the worst globally. This affects citizens' retirement savings invested there and companies' ability to raise capital.
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The losses may be due to political uncertainty, rising US interest rates causing investors to pull out, and a weakening Kenyan shilling. The central bank has also raised interest rates, making bonds more attractive than stocks.
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New taxes and expectations of weaker economic performance have lowered expectations of company earnings, also hitting stock prices.
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More government borrowing may crowd out private sector lending, further discouraging investment.
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Long-term solutions involve diversifying the economy, investing in infrastructure and human capital, strengthening institutions and governance.