Nairobi, April 28 -- When the war in Iran broke out, global equities markets were hit by selloffs as investors fled to the safety of dollar holdings amid fears of rising inflation and economic recession.

This stopped the rally at the Nairobi Securities Exchange (NSE), as foreigners sold shares worth a net of Sh4.3 billion in March, largely on large blue chips that have high exposure to international investors.

Local institutions were also offloading equities to keep a liquid position in order to take advantage of potentially higher fixed income returns if higher inflation pushes the Central Bank of Kenya to raise interest rates.

The result has been a sharp contrast in the performance of the bourse before and after the war started on Fe...