UPDATE 1-Kenyan shilling slips vs dollar, shares rise

* Shilling seen weakening due to dollar demand
* Market eyes inflation data due on Friday
* Shares seen gaining as yields fall in debt market

(Updates with close, adds shares)
By Kevin Mwanza
NAIROBI, Aug 27 (Reuters) - The Kenyan shilling
dipped against the dollar on Monday as importers bought the U.S.
currency to meet their end-month obligations, while shares rose,
helped by investors shifting out of the debt market due to
falling yields.
At the market close at 1300 GMT, commercial banks quoted the
shilling at 84.00/20 per dollar, down slightly from Friday's
close of 83.90/84.10.
"End-month dollar demand may push the shilling to touch
84.40/50," said Chris Rwengo, head of trading at Standard
Chartered Bank.
The shilling, which has gained 1.2 percent against the
dollar this year, has been stuck in the range of 83.80-84.20
against the dollar for more than three weeks.
Rwengo said the market was focusing on inflation data for
August, due out later in the week, which could drop for the
ninth straight month, paving the way for another hefty rate cut
at a Sept. 5 Monetary Policy Committee meeting.
The central bank embarked on a monetary policy easing cycle
in July, cutting its policy lending rate by 1.5 percentage
points to 16.5 percent, to support the flagging economy.
The bank, which has also been actively mopping up liquidity
using repurchase agreements, stayed out of the market on Monday,
saying liquidity was well balanced.
On the stockmarket, the benchmark NSE-20 share index
rose for a second straight session, edging up 0.3
percent to 3,839.12 points, led by sugar cane grower and miller,
Mumias, which gained 3.9 percent to close at 6.55
shillings per share.
"With a dividend yield of 8.4 percent, investors are
targeting Mumias's shares before the announcement of their
full-year results (next month)," said Ronald Lugalia, an analyst
at Afrika Investment Bank.
Lugalia said investors were turning to equities, after
yields on short-term government debt fell.
At auctions last week, the yield on the benchmark 3-month
Treasury bill tumbled 168 basis points to 8.58 percent, while
the yield on the 6-month paper slid to 10.03 percent from 11.366
percent.
Kenya Power, the country's sole electricity
distributor, rose 3.2 percent to 17.25 shillings as investors
bet it would post higher earnings for its year ended June, due
to a stable supply of electricity on the back of good rainfall
that filled dams used for hydroelectric plants.
In the debt market, government bonds worth 4 billion
shillings ($47.6 million) were traded, down from 4.5 billion
shillings on Friday.
...........................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 = 84.0000 Kenyan shillings)

(Editing by Duncan Miriri and Susan Fenton)