UPDATE 1-Kenyan shilling weakens, bank stocks push shares higher

Mon Jan 6, 2014 9:23am EST

* Bank stocks drive main share index higher
    * Dollar demand among manufacturers hits shilling

 (Adds market close, stocks, bonds)
    By George Obulutsa
    NAIROBI, Jan 6 (Reuters) - The Kenyan shilling 
weakened on Monday due to dollar demand from the manufacturing
and energy sectors and traders said it would remain under
pressure in coming days, while the Kenyan stock exchange's main
index closed higher.
    At close of trade at 1300 GMT, commercial banks quoted the
shilling at 86.95/87.05 to the U.S. dollar, compared with
Friday's close of 86.80/87.00. The shilling touched an intra-day
low of 87.10/20 earlier in the session.
    "It's been a bit of a ping-pong day," said a senior trader
at one commercial bank.
    "We are waiting for the majority of the liquidity to come
back to the market, then we will get a feel of what's going on."
    Earlier in the session, traders said the shilling had
weakened on the increased corporate demand for dollars.
    "The market has opened on a weaker note after real demand
from corporate clients pushed it up. (Demand for dollars is)
from manufacturing and energy," said Sheikh Mehran, a senior
trader at KCB Bank Group.
    Traders said they expected the shilling to trade in a range
of 86.90 to 87.50 in the days ahead.
    Technical analysis of the 14-day and 50-day weighted moving
averages suggested the shilling would continue to weaken.
    The shilling has shed 0.4 percent against the dollar since
the start of 2014.
    
    BANK STOCKS GAIN
    On the Nairobi Securities Exchange, the main NSE-20 Share
Index was up 39.39 points, or 0.8 percent, to close at
4,940.51, due especially to gains by banks and by 
telecommunications firm Safaricom.
    Equity Bank was up 3.9 percent at 33.00 shillings
per share after earlier surging 4.7 percent to 33.25 shillings. 
Kenya Commercial Bank closed the session up 1 percent
at 48.50 shillings after rising 2.6 percent to 49.25 shillings.
    Safaricom, which is typically the most traded stock on the
exchange, closed 2.3 percent higher at 11.05 shillings a share
after jumping 3.2 percent to 11.15 shillings in earlier trade.
    "A lot of investors have decided to come in to take in long
positions for the year," said Daniel Kuyoh, research analyst at
Kingdom Security. He said investors expected banks to report
solid full year results, which are due by the end of March.
    On the secondary market, government bonds valued at 100.3
million shillings ($1.15 million) were traded, up from 38.3
million 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 = 86.8500 Kenyan shillings)

 (Editing by James Macharia and Gareth Jones)
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