UPDATE 1-Kenyan shilling firms on liquidity mop-up; stocks weaken

Mon Mar 31, 2014 10:57am EDT

Related Topics

* Main share index down 0.5 percent
    * Energy sector dollar demand seen checking shilling gains

 (Adds market close, stocks, bonds)
    By George Obulutsa
    NAIROBI, March 31 (Reuters) - The Kenyan shilling 
firmed slightly on Monday, helped by the central bank soaking up
excess liquidity. 
    Stocks closed lower, pulled down by Uchumi Supermarkets
, Barclays Bank Kenya and Co-operative Bank
.
    At the 1300 GMT market close, commercial banks quoted the
shilling at 86.30/40 to the dollar against Friday's close of
86.40/50.
    "The shilling has closed a bit stronger. This is just the
gradual effects of the CBK mopping up excess liquidity. If you
look at corporate activity, it's been a bit slow," said Bank of
Africa trader Robert Gatobu.
    The central bank mopped up 16.25 billion shillings ($187
million) last week and another 2.15 billion shillings on Monday.
    Removing excess liquidity makes it relatively costlier to
hold onto long dollar positions, which in turn helps strengthen
the shilling. 
    Traders said any further strengthening of the shilling -
which is up 0.4 percent so far this year - could be offset by
foreign currency demand from oil importers. Traders predicted a
86.25-86.60 range for the shilling in coming days.
    "We expect oil companies to start coming to the market in
the new month. So I see the shilling boxed in a range, largely
unchanged," a senior trader at another commercial bank said.
    On the Nairobi Securities Exchange, the main NSE-20 Share
Index closed down 0.54 percent at 4,945.78 points.
    Silha Rasugu, analyst at Genghis Capital, said Barclays,
which closed down 3.6 percent at 16.10 shillings a share, was
driven lower by the stock starting to trade ex-dividend.
    Co-operative Bank ended the session 1.2 percent lower at
20.00 shillings. "Co-op Bank had hit a high of close to 21,
which is an all-time high. So it's bound to have some
profit-taking on that. But fundamentals remain favourable in
terms of its position in the banking sector," Rasugu said.
    Uchumi Supermarkets - which aims to complete a rights issue
in the second half of its 2014 financial year to fund expansion
- ended the session down 0.6 percent at 14.55 shillings a share.
    "There is some scepticism on the rights issue, so chances
are people would look to buy back in two weeks at a discounted
price," Rasugu said.
    "The results they released a few weeks ago were dismal in
terms of sales revenue. As they look to expand, there should be
a subsequent increase in sales to support the expansion plan."
    On the secondary market, government bonds worth 1.12 billion
shillings were traded, compared with 807.8 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 = 86.7100 Kenyan Shillings)

 (Reporting by George Obulutsa; Editing by Richard Lough/Ruth
Pitchford)
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