Nairobi — A Steadman poll has given a high rating of 64 points to investor confidence in Kenya despite heightened political temperatures in the country.

Releasing its second Kenyan Business Leaders Confidence Index yesterday, the Steadman report, however, showed a three points drop in the index, up from 67 points recorded in the September 2005 rating.

However, the report indicates that business confidence rating of 64 points was still a strong performance given that an index reading of 50 points reflects average perceptions.

The Steadman survey carried out during the last quarter of 2005 attributed the drop in the overall index to a big confidence plunge among executives in the agricultural sector, which dropped by 15 points.

The drop in the sector, it says, was largely driven by the current ravaging drought experienced in the country.

Despite a confidence drop by business leaders in the agricultural sector, executives in telecommunication and Information Technology recorded the highest increase in economic confidence.

Hotels and tourism sector for the second time demonstrated continued high optimism, with the sector's overall index standing at 74 points. An overwhelming majority from the sector (94 per cent in December, up from 75 per cent in September) indicated that the current economic conditions are better than six months ago.

This sector, according to the survey findings, has high expectations for the country's economy in the next six months, with 82 per cent of the business leaders interviewed displaying strong feeling for a better economic performance during the period.

Agriculture is now the most pessimistic sector at 53 points. In September, 71 per cent of the business leaders in Agriculture felt that the current economic conditions were better, compared to 60 per cent by December. The leaders were also pessimism about the performance of the sector in the next six months.

The Steadman Group's report said that while 43 per cent in September expected a better economy during the review period, this dropped by 13 per cent to stand at 30 per cent by December 2005.

The BLCI is released on a quarterly basis and supplements other economic indicators. The first was launched in September last year in Kenya and it has since expanded to cover four other African countries.

A total of 420 business leaders of large and medium sized companies were interviewed in the five African countries - Kenya, Uganda, Tanzania, Zambia and Ghana. Of these total, 121 were interviewed in Kenya, 61 in Uganda, 99 in Ghana, 55 in Tanzania and 84 in Zambia.

Data was collected through telephone, questionnaires and face-to-face interviews.