UPDATE 1-Kenyan shilling, shares rally on peaceful vote bet

Wed Feb 27, 2013 11:05am EST

Related Topics

* Shilling records biggest intraday gain this year
    * Main share index adds a percentage point
    * Investors attribute gains to polls optimism

 (Adds markets close, shares)
    By Kevin Mwanza
    NAIROBI, Feb 27 (Reuters) - The Kenyan shilling 
recorded its biggest daily gain against the dollar this year on
Wednesday to hit a six-week high due to optimism around a
presidential vote next week while shares rose.
    Traders said investors were betting the closely contested
Presidential vote on March 4 will not result in ethnic violence
witnessed after the last election in 2007.
    The shilling rallied 1.2 percent to close the session at
86.20/30 against the dollar, a level last touched on Jan 14, and
stronger than Tuesday's close of 87.15/35.
    "Foreigners are selling dollars to buy into local stocks and
bonds. That has triggered other players to sell dollars too,"
said Julius Kiriinya, a trader at African Banking Corporation. 
    The local currency has gained 1.8 percent from a one-year
low of 87.80/88.00 it hit on Jan. 29, after liquidity surged in
the money markets as risk-averse investors opted for short-term
financial assets ahead of the  polls. 
    The central bank has been actively intervening to support
the shilling by mopping up excess liquidity from the money
markets and occasionally selling dollars to banks. 
    The shilling is down only 0.2 percent against the dollar in
the year-to-date, surprising analysts who had expected it to
trade at about 88.00 per dollar in the run-up to the polls.
    "The market is betting on smooth elections. Just look at
some equity counters," said a trader at another commercial bank.
    The main NSE-20 share index rose 1 percent to close
at 4,513.55 points, as investors bought into the positive
sentiments around the elections.
    "The market was upbeat today, literally shrugging off any
election related fears. Most stocks have gained some ground
backed by the fair price," said Faith Atiti, an analyst at NIC
Securities.
    KenGen, the country's main electricity producer,
rose for the third straight session, adding 5.6 percent to 12.25
shillings as the market expected it to post higher earnings for
its first-half ended December.
    The firm posted a 14 percent jump in its half-year pretax
profit to 2.43 billion shillings. The earnings were unveiled
after markets had closed. 
    Equity Bank, the country's biggest bank by
customers, rose 3.7 percent to 27.75 shillings ahead of its
full-year earnings on Thursday, which are also expected to be
positive.
    In the debt market, the weighted average yield on Kenya's
364-day Treasury bills rose to 12.362 percent at 
auction, while the 182-day bills interest rate rose
to 9.084 percent. 
    In the secondary debt market, bonds worth 1.9 billion
shillings were traded, up from 858.7 million shillings 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:
                                    
            
 
 (Editing by Duncan Miriri, Ron Askew)
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