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UPDATE 1-Banks lift Kenyan shares, shilling under pressure
March 25, 2014 / 2:36 PM / in 4 years

UPDATE 1-Banks lift Kenyan shares, shilling under pressure

* Standard Chartered gains after full year profit jumps
    * Importer dollar demand weighs on shilling

 (Adds closing rate, shares)
    By Duncan Miriri
    NAIROBI, March 25 (Reuters) - Kenyan stocks firmed on
Tuesday, led by banks including Standard Chartered Bank of Kenya
after it announced stronger full year profits, but importers'
appetite for dollars weighed on the shilling.
    The main NSE-20 share index rose 13.03 points to
stand at 4,974.05 points. StanChart Kenya was among
the top gainers, up 1.6 percent to 313 shillings per share.
    Shares in the lender rose after it reported a 16 percent
rise in pretax profit and a higher dividend. 
    "We note that the (2013) results are above our forecasts ...
Due to the bank's trading multiples, we maintain our 'hold'
recommendation on StanChart Bank," Kestrel Capital said in an
analyst note.
    Overall, the banking sector had 4.3 million shares traded,
representing 30 percent of the day's traded volume.
    Kenyan banks including the largest lender by depositors,
Equity Bank, and the biggest by assets, KCB,
posted double-digit earnings growth last year, though rising bad
debts curbed earnings.   
    In the foreign exchange market, the shilling lost
some ground as dollar demand from manufacturers and other
importers picked up.
    At the 1300 GMT close of the market, leading commercial
banks posted the shilling at 86.60/70 per dollar, down from
Monday's close of 86.40/60.
    "There is slight demand in the market from manufacturers and
importers and that's pushed the shilling lower," said Andlip
Nazir, a senior trader at I&M Bank.
    
    EXCESS LIQUIDITY
    The shilling has recently been under pressure from a drop in
short-term interest rates, which makes it easier for banks to
fund long dollar positions, but the central bank's mopping up of
liquidity has provided some support.  
    Nazir said the shilling's direction could hinge largely on 
whether the central bank continues to mop up excess liquidity.
In such operations, the central bank makes it relatively more
expensive to hold onto long dollar positions, which in turn
makes the shilling strengthen.
    The bank stayed out of the market on Tuesday.
    "We could see a move towards 86.70/80 but I don't see a
major depreciation of the shilling (this week)," he said.
    In the debt market, bonds worth 2.51 billion shillings
($28.98 million) were traded, rising sharply from a volume of 82
million shillings in the previous session.
               ...........................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 = 86.6000 Kenyan Shillings)

 (Additional reporting by Drazen Jorgic; Editing by James
Macharia and Gareth Jones)

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