UPDATE 1-Kenyan shilling weakens, stocks creep higher

Mon Apr 14, 2014 10:57am EDT

* Importer dollar demand weighs on the shilling

* Foreign investors push KCB Bank shares higher (Adds closing rate, shares)

By Drazen Jorgic

NAIROBI, April 14 (Reuters) - Kenya's shilling lost ground to the dollar on Monday, weakened by oil importers buying greenbacks and an uptick in market liquidity, while stock inched up.

The shilling finished the day at 86.70/90 to the dollar, down from Friday's close of 86.55/65.

"We've seen oil importers in the market, which has weakened the shilling," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.

The central bank mopped up 12 billion shillings ($138.41 million) through repurchase agreements during the day. It has sought to mop up 17 billion shillings.

The bank has frequently drained liquidity from the market over the past month after overnight borrowing rates tumbled, making it cheaper for banks to fund long dollar positions and put pressure on the shilling.

On the Nairobi Securities Exchange, the main NSE-20 Share Index nudged 0.1 percent higher to close at 4909.10 points.

Shares of KCB Bank, the country's biggest lender by assets, rose 0.5 shillings to 47.5 shillings per share. It gained because of demand from foreign investors before the period when the shares trade with a right to a dividend on May 12, one trader said.

"(Interest in ) KCB is because we are nearing the books closure date for its dividend," said the trader.

In the debt market, bonds valued at 3.53 billion shillings were traded, down from 4.14 billion shillings worth of bonds traded on Friday.

KES= KES1=...........................Shilling spot rates

KESF= 0#KESF=.....................Shilling forward rates

EURKES= KESX= KESX1=.......................Cross rates

KES=KE..................................Local contributors

CBKINDEX.......................Central Bank of Kenya Index

KE/DEBT.....................Kenyan Bonds contributor pages

CBK03 CBK06 KE3MTB=...............Treasury bill yields

CBK04..................Central bank open market operations

CBK07.........................Horizontal repo transactions

KEIBR=, CBK02................Daily interbank lending rate

0#KETSYSTR=.............................Kenya Bond pricing

ECONAFRICA..................Real time Africa economic data

<ECI & AFR> ...........................African economic news

.NSE20 .................................NSE-20 Share Index

.NASI .................................NSE All Share Index

.FTFNKEN1 ...........................FT NSE Kenya 15 Index

.FTFNKEN2 .......................... FT NSE Kenya 25

IndexSPEED GUIDES:

REUTERS KES/1 KE/DEBT MONEY KE/EQUITY ($1 = 86.7000 Kenyan Shillings) (Editing by Duncan Miriri, Larry King)