UPDATE 1-Kenyan shilling weakens, stocks close higher

Tue Jul 1, 2014 10:41am EDT

Related Topics

* Weak economic data puts pressure on shilling
    * Stocks close higher, Housing Finance surges

 (Adds stocks, bonds, markets close)
    By George Obulutsa
    NAIROBI, July 1 (Reuters) - The Kenyan shilling 
weakened on Tuesday, undermined by importer demand for dollars,
amid concerns that the east African country's foreign exchange
earners were flagging, while stocks rose, boosted by financial
sector stocks.
    At the 1300 GMT close of trade, commercial banks quoted the
shilling at 87.80/90 to the dollar, down from Monday's close of
87.50/60.
    "There is (dollar) demand. The big corporates were in the
market but there was no supply to match demand. There was
energy, manufacturing, so no specific sector," John Njenga,
trader at Commercial Bank of Africa, said.
    Traders said there were worries about dollar inflows after
official data showed leading foreign exchange earners such as
horticulture exports did not do well in the first quarter.
    On Monday, the statistics office said Kenya's economy grew
4.1 percent in the first quarter, slowing from 5.2 percent
growth in the same period last year, due to sluggish growth in
the agriculture sector and a drop in output from the hotel and
restaurant sector. 
    "On the back of the GDP numbers it (the currency) weakened
... there are reduced inflows from the key sectors that Kenya
relies on, namely floriculture, horticulture and tourism."
Sheikh Mehran, senior trader at Kenya Commercial Bank, said.
    Traders said the shilling was likely to trade in the
87.50-88.00 per dollar range in coming days.
    On the Nairobi Securities Exchange, the main NSE-Share Index
 was up 40.82 points, or 0.84 percent, to close at
4,925.86 points.
    Top gainers included diversified financial services company
British American (Britam), which said on Tuesday it
planned to buy a 24.75 percent stake in mortgage provider
Housing Finance, held by Equity Bank. 
    Equity and Housing Finance also rose after the announcement.
    Britam closed the session up 9.3 percent at 21.75 shillings
a share, after surging 21 percent to an all-time high of 24.00
shillings earlier in the day.
    Equity Bank jumped 2.2 percent to close at 47.00 shillings
after rising 4.3 percent to an all-time high of 48.00 shillings
earlier in the session.
    Housing Finance closed 9.3 percent higher at 46.75 shillings
after rising 12.3 percent to a record high of 48.00 shillings in
the earlier part of the day.
    "For Britam, given the announcement today, it's within their
strategy to basically capture the entire value chain: property
development," Ian Gachichio, research analyst at Kestrel
Capital, said.
    Gachichio added that while Equity's shares were excited by
the news of the share sale, they had also been rising in recent
weeks on plans by the bank to roll out mobile telecoms services.
    "Equity Bank generally, it's been rallying  because of
foreign investor buying mainly because of the ... since they
began announcing on their MVNO strategy," he said.
    On the secondary market, government bonds valued at 1.35
billion shillings were traded, compared with 8.51 billion
shillings traded on Monday.
               ...........................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; Editing by Alison Williams)
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