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UPDATE 1-Kenyan shilling, stocks down in foreign investor sell-off
January 30, 2014 / 3:15 PM / 4 years ago

UPDATE 1-Kenyan shilling, stocks down in foreign investor sell-off

* Shilling, stocks, close lower; foreign investors pull back
    * Tight liquidity to offer shilling some reprieve

 (Adds market close, stocks, bonds)
    By Drazen Jorgic and George Obulutsa
    NAIROBI, Jan 30 (Reuters) - The Kenyan shilling 
weakened on Thursday, hurt by importer demand and by foreign
investors exiting the stock exchange as part of a broad retreat
from emerging markets.
    At close of trade 1300 GMT, commercial banks quoted the
shilling at 86.20/30 to the dollar, compared with Wednesday's
close of 86.05/15. It touched a low of 86.30/40 during the
session.
    With the U.S. Federal Reserve further reducing its economic
stimulus programme on Wednesday, investors have been pulling out
of emerging markets and moving their money into safe-haven
assets instead. 
    "(The pressure on the shilling) is a reflection of what's
happening in emerging and frontier markets and we are not immune
from that," said Joshua Anene, a trader at Commercial Bank of
Africa. "We expect it to come under more significant pressure in
coming days."
    One source of support for the shilling has been tightening
liquidity in the market, which makes it slightly costlier for
banks to fund long dollar positions, which helps strengthen the
local currency.
    The weighted average interbank lending rate rose to 11.3670
percent on Wednesday from 10.5393 percent a day earlier, the
eighth rise in a row.
    On the Nairobi Securities Exchange, the main NSE-20 Share
Index was down 54.68 points, or 1.1 percent to close at
4,960.99, nearing a three-week low.
    The market pulled back in line with other emerging markets,
where foreign capital flight has hit stocks and local
currencies.
    "I think events as far away as the Argentine peso, the
midnight strike by Turkey, the collapse in the rand have all
imported some weakness into the Nairobi Securities Exchange,"
said Aly Khan Satchu, an independent analyst.
    "I think essentially we have seen a huge increase in the
foreign investor component of the stock exchange. That's been
the defining characteristic of the bull market. I think some of
these guys have felt that they should be taking profit." 
    Most of the large cap stocks took a hit.
    Telecoms firm Safaricom, which on any given day is
the most traded, was down 3 percent to close at 11.05 shillings
a share, a two-week low.
    Barclays Bank Kenya was down 2.9 percent to close
at 17.00 shillings a share.
    Virginia Wairimu, analyst at Suntra Investment Bank, said
upcoming announcements of bank and insurance company full year
earning results would give the market some reprieve.
    "In general, 2013 was a relatively good year for them,"
Wairimu said.
    Satchu said Kenya's stock market, just like others in
sub-Saharan Africa, was also still relatively more attractive
and therefore was expected to stabilise sooner rather than
later.
    On the secondary market, government bonds valued at 3.33
billion shillings were traded, down from 3.78 billion shillings
on Wednesday.
               ...........................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:
                                    
            
 
 (Editing by James Macharia)

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