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UPDATE 1-Kenya stocks continue winning streak, shilling steady
September 11, 2013 / 3:38 PM / 4 years ago

UPDATE 1-Kenya stocks continue winning streak, shilling steady

(Recasts with shares)

By Drazen Jorgic

NAIROBI, Sept 11 (Reuters) - eKenyan shares inched higher on Wednesday to continue their winning streak for the sixth session in a row, helped by foreign investors looking to enter a rising market, while the shilling was steady against the dollar.

The benchmark NSE-20 share index rose 0.1 percent to 4727.66 points, sustaining a recovery following two weeks of falls when investors booked profits on companies’ half-year earnings.

“Foreign investors are taking advantage of the current stable prices in the market right now,” said Ronald Lugalia, an analyst at Afrika Investment Bank.

Lugalia said foreign investors accounted for most of the buyers on the market even though trading was roughly split between local and international participants.

“Markets had been correcting ... so it makes sense (for foreign investors) to make an entry into the market,” Lugalia added.

Kenyan shares have rallied since the central bank held key interest rates at 8.5 percent last week, with most of the foreign investor interest centred around large cap stocks.

Barclays Kenya shares rose 1.5 percent to close at 17 shillings, though the bourse’s two most capitalised stocks, Safaricom and East African Breweries, retreated 0.6 percent and 0.3 percent after several positive days.

In foreign exchange, commercial banks quoted the shilling at 87.55/65 at the 1300 GMT market close, marginally weaker from Tuesday’s close of 87.50/60 to the dollar.

The shilling has moved little since the central bank kept rates on hold last Tuesday.

However, the bank has been mopping up excess liquidity in the market all week and on Wednesday it absorbed another 2 billion Kenyan shillings ($23 million) using repurchase agreements (repos).

Traders say the bank appears to be trying to pull the overnight interbank lending rate closer to the main central bank rate of 8.5 percent.

A higher overnight lending rate effectively makes it more expensive for institutions to hold dollars, pushing up demand for the shilling.

The yield on Kenya’s 182-day Treasury bills fell to 10.089 percent at an oversubscribed sale on Wednesday from 10.460 percent at last week’s auction. The yield on the 364-day paper also declined to 10.756 percent from 11.402 percent last week.

In the secondary bonds market, debt worth 2 billion shillings was traded, down from 2.8 billion on Tuesday.

...........................Shilling spot rates .....................Shilling forward rates .......................Cross rates ..................................Local contributors .......................Central Bank of Kenya Index .....................Kenyan Bonds contributor pages ...............Treasury bill yields ..................Central bank open market operations .........................Horizontal repo transactions ,................Daily interbank lending rate .............................Kenya Bond pricing ..................Real time Africa economic data <ECI & AFR> ...........................African economic news .................................NSE-20 Share Index .................................NSE All Share Index ...........................FT NSE Kenya 15 Index .......................... FT NSE Kenya 25 Index SPEED GUIDES:

Additional Reporting by Richard Lough; Editing by James Macharia

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