UPDATE 1-Kenya shilling firms as dollar demand eases, Scangroup jumps

Wed Apr 30, 2014 11:37am EDT

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* Shilling seen firming to 86.50-86.80 range
    * Scangroup shares jump 31 pct on surprise dividend

 (Adds closing rate, shares)
    By Duncan Miriri
    NAIROBI, April 30 (Reuters) - Kenya's shilling was firm on Wednesday and traders said
it was likely to stay strong against the dollar in the next few sessions due to an anticipated
fall in corporate appetite for greenbacks.
    The stock market finished flat despite a jump in Scangroup shares, after the
company announced a surprise dividend.
    By the 1300 GMT close of trade, commercial banks posted the shilling at 86.80/90 per dollar,
barely changed from the previous day's close of 86.85/95. 
    The currency of east Africa's biggest economy has been trading in a tight band of
86.80-87.00 in recent days.
    "However, going forward as the demand settles out of the market, we project that the
shilling will recoup some of its losses and probably trade around the 86.50 to 86.80 range,"
said one senior trader with a leading commercial bank.
    The central bank's rate-setting committee left its key lending rate at 8.5
percent, in line with the market's expectations and having no impact on the exchange rate. 
    Year-on-year inflation inched higher to 6.41 percent in the year to April, but
not enough to change the monetary policy stance. 
    "It's a demand-driven currency," said the senior trader.
    The central bank mopped up 5.35 billion shillings from the market on Wednesday in repo and
term auction deposits, all the bids it received for its 10 billion shilling offer. 
    On the stock exchange, advertising firm Scangroup jumped 31 percent to close at 61.50
shillings per share, after it unexpectedly said it would pay a dividend for last
year. 
    "There was a lot of anticipation they wouldn't be proposing any dividend for the year but
they still declared (a dividend)," Sterling Investment Bank research analyst Maureen Kirigua
said.  
    The gains were however not enough to prop up the benchmark share index NSE-20,
which finished nearly flat, shedding 7.55 points or 0.2 percent to close at 4948.97 points. 
    KCB Bank gave up the previous day's gains to close at 49 shillings per share.
    Shares in the bank had jumped 1 percent in Tuesday's session in anticipation of earnings
growth for the first quarter. The bank said its pretax profit jumped by 31 percent during the
period. The results were issued after the market had closed.
    In the debt market, bonds worth 2.9 billion shillings ($33.33 million) were traded, down
from a volume of 3.57 billion shillings in the previous day.    
               ...........................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 = 87.0100 Kenyan shillings)

 (Editing by James Macharia and Louise Ireland)
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