November 11, 2014 / 2:57 PM / 3 years ago

UPDATE 1-Kenyan shilling touches three-year low, stocks rise

* Shilling tests 90 level against dollar
    * KCB shares lifted by positive results

 (Updates with shilling, stocks close)
    NAIROBI, Nov 11 (Reuters) - The Kenyan shilling 
touched a three-year low on Tuesday as importers, companies and
banks bought dollars against sparse hard currency inflows, while
stocks rose.
    The shilling closed at 89.95/90.05 to the dollar against
Monday's close of 89.75/85, having hit an intra-day low of
90.00/90.10, its lowest level since November 2011.
    The Kenyan currency has weakened by about 4.1 percent
against the dollar this year, mainly due to a slump in hard
currency inflows from tourism following Islamist attacks.
Inflows of dollars from tea exports have also dwindled owing to
weaker prices caused by a global glut of the commodity.
    Traders said on Tuesday there were concerns the shilling
could weaken even further if the central bank does not sell
dollars in the market.    
    The central bank has regularly drained excess liquidity from
the money markets in recent months, making it relatively
costlier to hold on to long dollar positions, which should help
strengthen the shilling.
    The bank on Tuesday sought to mop up 10 billion shillings
($111.17 million) in excess liquidity, after a similar action on
Monday when it sought to mop up 20 billion.
    "The expectation in the market is that the central bank
would intervene, but without any action from them people were
confident to test the 90 level," said Nahashon Mungai, a trader
at Kenya Commercial Bank. "The mop-ups are not adequate to keep
the shilling from falling, only direct sales of dollars in the
market will do."
    In the stock market, the blue-chip NSE-20 index 
rose 39.99 points or 0.8 percent to 5,098.40 points.
    Among the gainers was Kenya's biggest bank by assets, KCB
, whose shares rose 3 percent to 55 shillings after the
lender reported a 17 percent jump in pretax profit for the first
nine months of this year. 
    "We still believe the stock is underpriced. Our model
suggests fair value of 60.73 shillings a share ... Our
investment case is informed by solid asset growth," said Old
Mutual Securities in a research note.    
    In the debt market, bonds worth 4.3 billion shillings were
traded, slightly up from the previous day's 2 billion.  

               ...........................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 US dollar = 89.9500 Kenyan shilling)

 (Reporting by James Macharia; Editing by David Holmes)

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