UPDATE 1-Kenyan shilling, shares fall for fourth session

Tue Jan 22, 2013 10:44am EST

* Shilling down 1.4 percent this year
    * Shares fall as investors book gains

 (Updates with close, shares)
    By Kevin Mwanza
    NAIROBI, Jan 22 (Reuters) - Kenya's shilling and its
share market both fell for the fourth straight session on
Thursday as importers sought dollars and investors took profits
on a new year rally at the bourse.
    At the 1300 GMT close of the market, commercial banks posted
the shilling at 87.35/45 per dollar, 0.4 percent weaker than
Monday's closing rate of 86.90/87.10. 
    "There is some dollar demand, especially from the energy
side and banks covering positions," said Julius Kiriinya, a
trader at African Banking Corporation.
    Traders said the shilling's weakening past the 87.00
resistance level ushered in 87.50 per dollar as the next target.
    They said the central bank would have to remain vigilant in
the run-up to an election set for March 4, the first since the
2007 poll when widespread ethnic violence killed more than 1,200
people and caused massive disruption to the economy. 
 
    "The shilling still looks vulnerable and will to a certain
degree look to the central bank for support in the lead up to
the general elections," Bank of Africa said in a daily report. 
    But traders mainly attributed the pressure on the currency
to traditional demand for dollars by firms starting to implement
their capital expenditures for the year in the first quarter,
compounded by a drop in dollar inflows from tourism and
remittances. 
    The shilling has lost 1.4 percent against the dollar this
year, prompting the central bank to support the currency by
selling dollars to commercial banks.
    The bank has also been mopping up excess liquidity from the
market to keep the exchange rate stable by making it slightly
more expensive for banks to fund long dollar positions.  
    During the session, it offered 7 billion shillings in
repurchase agreements (repos), and accepted all the 9.5 billion
shillings ($109 million) it received in bids at a weighted
averaged interest rate of 6.315 percent. 
    At the Nairobi Securities Exchange, the benchmark NSE-20
Share Index shed 0.2 percent to close at 4,461.32
points.
    It has lost 2 percent over four sessions since profit-taking
kicked in following a 10.4 percent rally in the first 12
sessions of this year, which sent it to a two-year high on Jan.
16.
    "The market has corrected sharply on heightened profit
taking," said Faith Atiti, an analyst at NIC Securities.
    Shares in the country's main power producer KenGen 
fell by 1.9 percent to 13.10 shillings each, while Safaricom
, the country's leading telecoms operator and one of
the most traded stocks on the bourse, closed 1.7 percent down at
5.65 shillings a share.
    On the debt market, government and corporate bonds worth 
782 million shillings were traded, down from 800 million
shillings traded on Monday. 
               ...........................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 = 86.9000 Kenyan shillings)

 (Editing by Duncan Miriri/Ruth Pitchford)
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