The global financial markets are reeling from the impact of steep and sweeping tariffs imposed by U.S. President Donald Trump on April 2nd, sparking a widespread sell-off in equities.
- •However, the Kenyan stock market has emerged as an unexpected bright spot, with foreign investors turning net buyers amid the turmoil.
- •Coupled with attractive dividend yields from recently released bank earnings, the Nairobi Securities Exchange (NSE) is drawing renewed interest from global investors.
- •Although Kenya has acknowledged the challenges posed by the new tariff regime, the trade ministry also sees opportunity.
Impact of Trump’s Tariffs announcement on Global Markets
President Trump’s announcement of sweeping tariffs—ranging from 10% on all exporters to the U.S. to over 50% on select nations like China and Lesotho—has sent shockwaves through global markets.
- •U.S. stocks suffered their worst single-day drop since 2020, wiping out $2.5 trillion in market value while Asian shares plummeted to two-month lows.
- •The European Union and China have vowed retaliation, deepening fears of a protracted trade war.
- •South African stocks plunged 3.4% – their steepest drop since 2022 – after Trump imposed 31% tariffs on the country’s exports, hammering banks, telecoms, and retailers.
“Whilst South Africa remains committed to a mutually beneficial trade relationship with the United States, unilaterally imposed and punitive tariffs are a concern and serve as a barrier to trade and shared prosperity,” South Africa’s President Cyril Ramaphosa said in a statement on Thursday.
Kenyan Markets
Despite the global downturn, Kenya’s stock market displayed resilience on Thursday, April 3, 2025:
- •The benchmark NSE 20 Index rose by 0.35% to close at 2,233.39 as foreign investors assumed a net buying position, accounting for 76.84% of total purchases, signaling confidence in Kenyan equities.
- •Year-to-date, the Nairobi All Share Index (NASI) has gained 6.29%, while the NSE 20 Share Index has risen 11.08%.
The Kenyan market’s appeal has been further enhanced by alluring dividend payouts from banks following their full-year 2024 earnings releases. Major lenders such as Standard Chartered, Stanbic, Equity Group and Cooperative Bank announced robust profits and generous dividend distributions, offering yields that are competitive both regionally and globally.
Tariff Opportunities, Challenges
While Kenya faces a 10% tariff on exports to the U.S.—set to take effect on April 9, 2025—the government sees silver linings.
In a press release, the Ministry of Investments, Trade and Industry (MITI) highlighted Kenya’s relative advantage over competitors like Vietnam (46%), China (34%), and India (26%), which face significantly higher tariffs. Key opportunities include:
1. Textile Sector Growth: Kenya could attract U.S. buyers seeking alternatives to high-tariff countries, spurring investment in local production.
2. Manufacturing Expansion: Industries like apparel, leather, and agro-processing stand to benefit as global supply chains adjust.
3. Government Support: MITI is collaborating with stakeholders to identify high-potential exports and incentivize sectoral investments.
