The flotation of Safaricom, Kenya’s largest mobile phone operator, has been pulled following the postelection violence in the country, it emerged yesterday.

Kenya’s Government had hoped to sell 25 per cent of the group – which is part-owned by Vodafone – in a public offering that was expected to be the country’s biggest.

The sale, on the Nairobi stock exchange, was on course to raise up to 40 billion Kenyan shillings (£297 million). It had already been delayed several times.

Trading on Kenya’s stock exchange was suspended yesterday as the unrest continued. It ended business an hour after opening when gunfire was heard in the business district.

The World Bank cautioned that the postelection violence could threaten the country’s impressive economic gains and harm regional economies that depend on its status as an East African business hub. GDP growth stood at an estimated 6.9 to 7 per cent last year.

Analysts said the timing of the violence, during a crucial month for tourism, meant that its impact would be further exacerbated.

Richard Segal, Africa fixed income strategist at Renaissance Capital, said: “In the more medium term the outlook is not promising. January is a huge month for tourism. Aid flows will fall. Foreign direct investment flows will fall.”

Vodafone holds a 40 per cent stake in Safaricom, with 60 per cent held by Telkom Kenya. The British mobile group’s investment was highlighted recently when it emerged that it was the subject of a preliminary assessment by the Serious Fraud Office.

The SFO is working with a Kenyan parliamentary watchdog to determine the identity of the owner of Mobitelea Ventures, a shell company to which Vodafone sold part of its holding in Safaricom five years ago.

Emerging markets are the new hunting ground for mobile phone operators as they seek to offset slowing growth in their core Western markets.

Last year Safaricom reported net profits of 12 billion Kenyan shillings on sales of 47.4 billion Kenyan shillings.

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