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UPDATE 1-Kenya shilling dips; KCB, Safaricom weaken stocks
May 13, 2014 / 2:40 PM / in 3 years

UPDATE 1-Kenya shilling dips; KCB, Safaricom weaken stocks

(Adds market close)
    NAIROBI, May 13 (Reuters) - The Kenyan shilling 
weakened on Tuesday due to demand for dollars from corporate
clients, while shares fell as investors booked profits.
    The shilling closed at 87.25/35 against the dollar, weaker
than Monday's close of 87.05/15.
    Traders said the currency could weaken towards 87.50/70 in
the next few days, barring any aggressive action by the central
bank to curb volatility in the exchange rate.
    The bank has frequently mopped up excess liquidity from the
market using repurchase agreements in recent months, helping to
maintain stability in the exchange rate.
    Kenyan firms, who have many foreigners among their
shareholders, usually buy dollars mid-year to pay annual
dividends, adding to the demand for dollars from importers in
the energy and manufacturing sectors. 
    "The mop-ups help for a while, but the shilling still has a
weak bias in the coming days because of renewed corporate
demand," said Sheikh Mehran, senior trader at Kenya Commercial
Bank.
    Mehran said the demand for dollars was from companies across
the board seeking to pay dividends to their parent companies
abroad, importers as well as from government suppliers who have
been paid for rendering an assorted range of services.
    "The government is paying various contractors, and this is
happening as we head to the end of the fiscal year in June, and
some of the contractors were buying dollars," Mehran said.  
    The benchmark NSE 20 Share Index shed 2.82 points to
stand at 4,975.39 with turnover doubling from Monday's trading,
driven partly by stronger foreign investor participation.
    Kenya Commercial Bank (KCB) led shares lower,
falling 4 percent to 47 shillings after investors booked profit
following a rally in the stock triggered by a 31 percent rise in
first-quarter pretax profit reported in April.
    The country's biggest telecoms operator and
index-heavyweight Safaricom also fell to 12.85
shillings from 12.90 shillings. The share has been an investor
favourite in recent weeks leading up to its results published on
Monday, when it reported a 23.8 percent rise in annual core
profits.
    "There was a lot of expectation on Safaricom, but now
investors are locking in their gains and are exiting the
counter," Moses Waireri, head of research at Sterling Investment
Bank.
    "KCB has had a good run and appears fully-valued at around
50 shillings, and it fell on the day. The movement of the two
had a big impact on the market."
    On the secondary market, government bonds valued at 2.88
billion shillings ($33.07 million) were traded, compared with
3.72 billion shillings 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:
                                    
            
  ($1 = 87.1000 Kenyan Shillings)

 (Reporting by James Macharia; Editing by Hugh Lawson)

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