Kenya's government bonds tumble as officials dispute Ruto election win

Kenya's government bonds fell sharply on Monday after a number of the country's top election officials disputed the result that had handed Deputy President William Ruto the win.

Scuffles had broken out and some diplomats had to be whisked away as the chairman of Kenya's election commission had prepared to announce the outcome of the Presidential vote held almost week ago.

Minutes before, the commission's deputy chair had told media at a separate location that she and three other commissioners would not "take ownership" of the results, claiming they were too opaque.

Fears of a repeat of the violent scenes that followed presidential polls in 2007 and 2017 sent Kenya's dollar denominated bonds down as much as 5 cents, with the 2024 maturity (XS1028952403=TE) falling the most, according to Tradeweb data.

"Although Ruto, now president-elect, had pledged 'no debt restructuring' markets appear to be reacting to the likelihood of a legal challenge to the election result, given the dissenting views of four electoral commissioners," Razia Khan, chief Africa economist at Standard Chartered, said by email.

"Any legal challenge would be seen as prolonging the uncertainty associated with the election."

Kenya, which is east Africa's largest economy, has seen its bonds come under intense pressure this year as worries about drought and a potential debt crisis have mounted.

The bonds had seen something of a rebound though in recent weeks as broader global market backdrop had become more favourable.