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UPDATE 1-Kenyan shilling eases, stocks edge higher
May 7, 2014 / 2:26 PM / 3 years ago

UPDATE 1-Kenyan shilling eases, stocks edge higher

* Dollar demand from energy firms pressures shilling
    * Weekend attacks in Nairobi and Mombasa hurt tourism

 (Adds markets close, stocks, bonds)
    NAIROBI, May 7 (Reuters) - The Kenyan shilling eased
slightly against the dollar on Wednesday due to demand for the
U.S. currency from energy firms and traders expected it to
remain pressured after weekend bomb attacks unnerved investors.
    On the Nairobi Securities Exchange, the main share index
edged higher.
    At close of trade at 1300 GMT, commercial banks quoted the
shilling 87.00/10 to the dollar, compared with Tuesday's close
of 86.95/87.05. Traders said they expected the shilling to trade
in a range of 86.80 to 87.50 in the coming days.
    "It's losing ground a bit on importer demand," said Julius
Kiriinya, trader at African Banking Corporation, referring to
energy firms seeking dollars.
    In the medium term, poor rainfall in parts of the country
where most farming takes place is seen weighing on the currency.
    Bomb attacks at the weekend that killed at least seven in
Nairobi and Mombasa are likely to hurt Kenya's already embattled
tourism industry, putting further pressure on the shilling.
    "The sentiment of a stronger shilling is still hurt because
of the recent terrorist attacks, and now we have failed rainfall
which is going to hurt economic growth," Sheikh Mehran, senior
trader at Kenya Commercial Bank, said.
    Excess liquidity was also taking a toll, traders said. The
central bank, which has regularly taken out excess liquidity
from the market in recent weeks, mopped up 4 billion shillings
from the money markets on Wednesday using repurchase agreements.
    
    The mop-ups make it relatively more expensive to hold long
dollar positions, which in turn helps support the shilling.
    "In the near term, the odds are stacked against the local
unit and we believe that, in the absence of any market-changing
event, the greenback will trade well above the 87.00
psychological level," Commercial Bank of Africa said in its
daily market report.
    On the Nairobi Securities Exchange, the main NSE-20 Share
Index was up a modest 3.37 points to close at 4,946.24 points.
    Helping lead the index higher were shares in telecoms firm
Safaricom, with was up 0.8 percent to 12.90 shillings.
    Equity Bank was up 1.3 percent to close at 39.25
shillings a share. Analysts say the stock has been helped by its
plans to open a telecoms services arm in a bid to increase its
share of the market for mobile-phone-based financial services.
    Safaricom releases full year results on May 12. It has
climbed in recent weeks in anticipation of higher pretax
profits.
    On the secondary market,  government bonds valued at 1.34
billion shillings were traded, up from 250.1 million shillings
traded on Tuesday.
    
               ...........................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 Richard Lough and Tom
Heneghan)

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