UPDATE 1-Kenyan shilling, main share index slip

Wed Jan 29, 2014 9:12am EST

* Main share index closes lower for third straight day
    * Shilling eases, weakness seen limited

 (Adds markets close, stocks, bonds)
    By George Obulutsa
    NAIROBI, Jan 29 (Reuters) - The Kenyan shilling eased
slightly on Wednesday and traders said they expected it to trade
in a narrow band, while the stock exchange's main index closed
lower for a third straight session. 
    At close of trade at 1300 GMT, commercial banks quoted the
shilling at 86.05/15 to the dollar, compared with Tuesday's
close of 85.95/86.05.
    During the day, the shilling weakened to a low 86.20/30
during the session, a level it last approached in mid-January.
    "(There is) quite a bit of (dollar) demand as we finish off
this month," Eric Gathecha, a trader at I&M Bank, said.
    Any further weakening was expected to be kept in check by
tight shilling liquidity. That makes it slightly more costly for
banks to fund long dollar positions, which helps strengthen the
local currency.
    The weighted average interbank lending rate rose to 10.5393
percent on Tuesday from 10.2298 percent a day earlier.
    "We don't expect much movement because the market is very
tight on the Kenya shilling," said Sheikh Mehran, a senior
trader at Kenya Commercial Bank.
    Traders said they expected the shilling to trade in a range
of 85.70 to 86.20 in coming days.
    On the Nairobi Securities Exchange, the main NSE-20 Share
Index fell 44.86 points, or 0.9 percent, to 5,015.67
points, driven by profit-taking.
    The NSE-20 Index gained 3.9 percent in the first three weeks
of the year, largely propelled by telecoms firm Safaricom
. Expectations of improved earnings lifted Safaricom to
a record high of 12.80 shillings on Friday. It ended Wednesday's
session 1.7 percent lower at 11.85 shillings.
    "Substantively, between the beginning of the year and last
week we have had a very good run, so there is a possibility it
could be a bit of a profit-taking," Eric Musau, research analyst
at Standard Investment Bank, said.
    On the secondary market, government bonds valued at 3.78
billion shillings were traded, compared with 3.37 billion
shillings traded a day before.
               ...........................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:
                                    
            
 
 (Reporting by George Obulutsa; Larry King)
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