UPDATE 1-Kenyan stocks rally for third straight day, shilling steady

Fri Aug 1, 2014 11:01am EDT

* Stocks rise for third day, led by financial sector
    * Shilling seen trading in tight range

 (Adds market close, stocks, bonds)
    By George Obulutsa
    NAIROBI, Aug 1 (Reuters) - Financial and telecoms stocks led
Kenya's main share index higher for a third consecutive day of
gains on Friday. The shilling held steady against the
dollar.
    The Nairobi Securities Exchange's benchmark NSE-20 Share
Index rose by 36.19 points, or 0.74 percent, to close
at 4,942.28 points. Telecom service provider Safaricom
, Equity Bank and investment firm Centum
Investments gained the most.
    Equity continued to rise after reporting a 21 percent rise
in first-half pretax profit. It closed up 1.1 percent at 45.75
shillings a share.
    Safaricom, which received approval to roll out a 14.9
billion shilling ($170 million) security and surveillance system
project and its 4G service, rose 2 percent to 12.45 shillings.
    "Those numbers could have helped the stocks gain interest on
the part of investors," said Eric Musau, research analyst at
Standard Investment Bank, referring to Equity bank's results.
    He said there was renewed interest by investors in
Safaricom, because of the security contract and 4G service.
    Centum Investments' shares rose after it announced
plans to acquire another 66 percent of the local K-Rep Bank. Its
shares rose 1.6 percent to 47.75 shillings.
    "They're purchasing a controlling stake in K-Rep ... and I
think investors were cheering on the news," Musau said.
    On the currency market, the shilling closed at 87.80/90 to
the dollar, unchanged for Thursday.
    Traders said tight supply of shillings was offsetting dollar
demand from oil and telecommunications companies.
    In a sign of tightening liquidity in the money markets, the
weighted average interbank lending rate rose to 10.0951 percent
on Thursday from 9.5093 percent the previous day, and from
8.7059 percent on Monday. 
    Tighter liquidity usually supports the shilling by making it
relatively more expensive to hold long dollar positions.
    "What's keeping it from doing that is the typical, natural
dollar demand at the end of the month," said Nahashon Mungai, a
trader at KCB Bank Group. "There has been quite a bit in the
last couple of days."
    Traders forecast the shilling will trade in the 87.50 to
88.20 range in coming days. The shilling has lost 1.4 percent to
the dollar so far this year. 
    On the secondary market, government bonds valued at 2.4
billion shillings ($27.37 million) were traded, down from 4.4
billion shillings traded on Thursday.
    
               ...........................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 = 87.7000 Kenyan Shillings)

 (Editing by James Macharia)