UPDATE 1-Kenya shilling weakens slightly, shares nudge lower

Mon Feb 10, 2014 8:56am EST

* Improving liquidity could weigh on the shilling
    * Safaricom shares fall by 0.84 percent

 (Adds shares, closing rate)
    By Duncan Miriri
    NAIROBI, Feb 10 (Reuters) - The Kenyan shilling 
weakened slightly against the dollar on Monday while shares
finished lower as foreign investors stayed on the sidelines,
traders said.
    At the 1300 GMT close of trade, commercial banks posted the
shilling at 86.15/25 per dollar, slightly weaker on Friday's
closing rate of 86.00/10.
    Market participants said the currency could weaken more due
to tumbling overnight lending rates that would make it slightly
cheaper for banks to hold long dollar positions.  
    "With liquidity improving on the money markets side, we
could see the shilling come under pressure," said Duncan
Kinuthia, head of trading at Commercial Bank of Africa.
    The overnight rate on the interbank borrowing market dropped
to 10.4298 percent on Friday from 11.1740 percent on Thursday.
 
    In the stock market, the benchmark NSE-20 share index
 lost 0.28 percent to close at 4818.28 points, weighed
on by reduced demand for shares during the session.
    "We have seen reduced participation by foreign investors,"
said Lynette Muriungi, a research analyst at Kestrel Capital.
    The sluggish demand sent shares in telecoms operator
Safaricom, hugely popular with foreign investors over
the past year, down by almost a percentage point to close at
11.85 shillings a share.
    In the debt market, bonds worth 1.27 billion shillings were
traded, up from 1.05 billion shillings worth of securities
traded in Friday's session.
    
               ...........................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
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 (Editing by Toby Chopra)