UPDATE 1-Kenya shilling seen weaker vs dollar, stocks dip

Thu Apr 26, 2012 12:22pm EDT

Related Topics

* Month-end demand for dollars to weaken local currency
    * MPC meeting to set pace for shilling
    * Bank stocks wilt, foreign investors flee bourse

 (Recasts with markets close, adds stocks)	
    By Kevin Mwanza and Beatrice Gachenge	
    NAIROBI, April 26 (Reuters) - The Kenyan shilling 
held steady on Thursday but traders said they expected it to
come under pressure from importers' demand for dollars at the
end of the month, while stocks fell for a second straight day.	
    At the close of markets 1300 GMT, commercial banks quoted
the shilling at 83.20/40 per dollar, barely changed from
Wednesday's close of 83.25/35.	
    "The shilling is expected to slightly weaken against the
greenback as end-month demand continues to trickle into the
market," said Bank of Africa in a daily report.	
    Traders said continued high demand for government securities
would, however, offer some support to the local currency. 	
    Yields on 91-day Treasury bills fell to 14.992
percent from 15.930 percent previously in an oversubscribed
auction a day after another auction drew heavy demand.
 	
    Dollar inflows from foreign investors buying into high
yielding debt securities have also helped lift the shilling this
year. Similar demand is expected to do so in coming weeks as
lower inflation keeps real returns positive.	
    Traders said the market was awaiting the central bank's
rate-setting meeting on May 3 to give direction for the local
currency. A rate cut would weigh on the shilling, which is up
2.2 percent against the dollar this year, on the back of central
bank's tight monetary policy. The bank has held its rate at 18
percent since December.	
    On the stock market, the benchmark NSE 20-Share 
fell 0.6 percent to 3,557.13 points on poor foreign investor
interest across most blue chips and a dip in heavily weighted
banking stocks, analysts said. 	
    Joy Migongo, an analyst at Kestrel Capital, said foreign
participation during the session accounted for about 39 percent
of total turnover, almost half the 70 percent daily average.
Most of the foreign trades on the bourse were on the sell side.	
    Migongo said risk aversion in the international markets due
to the festering eurozone crisis, was to blame for capital
flight at the bourse. 	
    Kenya Commercial Bank (KCB), the region's largest
bank by assets, fell 3.16 percent to 22.75 shilling ($0.27) as
investors who had piled into the share in anticipation of strong
results cashed in. The bank's results were issued after the
market closed.	
    KCB, the best performing stock on the bourse this year, said
first quarter pretax profits rose 35 percent. 	
    Profit taking also dented Equity Bank's share, one
of the most heavily traded at the bourse, which fell 2.3 percent
to 20.75 shillings after rising about 5 percent on Wednesday,
also on anticipation of strong earnings.	
    The bank posted a 29 percent increase in first quarter
pretax profit. 	
    "Locals (investors) were profit taking on the recent rally
on KCB," said Migongo.	
    In the debt market, government bonds worth 1.61 billion
shillings were traded, down from 3.11 billion shillings on
Wednesday.      	
               ...........................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:
                                    
            
  ($1 = 83.2500 Kenyan shillings)	
	
 (Editing by James Macharia)
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