UPDATE 1-Kenya shilling firms, shares fall

Mon Jan 13, 2014 9:59am EST

Related Topics

* IMF thumbs-up, upcoming Eurobond boost sentiment
    * Investors book stock market gains after rally

 (Adds market close, shares)
    By Duncan Miriri
    NAIROBI, Jan 13 (Reuters) - The Kenyan shilling rose
against the dollar on Monday, buoyed by growing signs of
confidence in the domestic economy on top of last week's weak
U.S. jobs data, while profit-taking hit the main share index.
    At the 1600 GMT close of trade, leading commercial banks
posted the shilling at 86.15/35 per dollar, up from Friday's
close of 86.30/50.
    "There is the feelgood factor after the IMF head came and
said things are on track," said Ignatius Chicha, treasurer at
Citibank Kenya.
    International Monetary Fund managing director Christine said
last week the Kenyan economy was on track to attain its growth
potential.
    The comments, based on stabler economic fundamentals after
inflation soared and the currency plunged in value in 2011, are
expected to boost inflows into Kenyan assets like government
securities, traders said.
    Kenya is preparing to market its debut Eurobond for a
minimum of $1.5 billion later this month or in February.
    Proceeds from the bond, which will be used to refinance an
existing loan and fund infrastructure projects, are expected to
boost already healthy foreign exchange reserves held by the
central bank.
    Traders said the bank's rate-setting meeting on Tuesday was
not likely to have much impact on markets. Its monetary policy
committee is expected to hold rates at 8.50 percent, with
inflation on target at a little more than 7 percent and the
exchange rate stable, they said.
    The dollar was under pressure on global markets following
Friday's disappointing U.S. jobs data, which strengthened the
case for the Federal Reserve to keep interest rates low for
longer.
    In the Kenyan stock market, the benchmark NSE-20 share index
 lost 0.84 percent to close at 5017.20 points as
investors took profits. The index has rallied more than 4
percent since Dec. 19, boosted by foreign investor appetite.
    "We expect it to maintain the 5,000-points support level in
the short to medium term," said Silha Rasugu, a research analyst
at Genghis Capital.
    Most firms are expected to report good earnings growth for
last year, Rasugu said, adding that the only concern was around
firms that have exposure to South Sudan where fighting has been
going on for weeks.
    KCB Bank and Equity Bank are among Kenyan
firms with operations in South Sudan although the full impact of
the crisis on their earnings has not been quantified yet.
    In the debt market, bonds worth 2.19 billion shillings were
traded, up from Friday's volume of 501 million shillings. 
      
               ...........................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 Edmund Blair)
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