April 23, 2014 / 3:16 PM / in 4 years

UPDATE 1-Kenyan shilling firms but further losses seen

* Shilling seen remaining under pressure
    * Banks lead winners on the bourse

 (Adds stocks, bonds, market close)
    By George Obulutsa
    NAIROBI, April 23 (Reuters) - Kenya's shilling firmed
0.2 percent on Wednesday, helped by the central bank draining
liquidity and dollar inflows from foreign investors buying a
Treasury bond, traders said.
    "It came off a bit (due to the) central bank mop-ups of the
shilling, and also ... there were some inflows, coming to settle
the bond," said John Muli of African Banking Corporation.
    The weighted average yield on Kenya's five-year Treasury
bond fell to 10.870 percent at a heavily subscribed
sale on Wednesday, from 11.952 percent at a previous sale in
November. The Central Bank of Kenya said it received bids worth
30.27 billion shillings ($347.53 million) for the 15 billion
shillings worth of paper on offer.
    At the 1300 GMT market close, the shilling traded at
86.90/87.00 against Tuesday's close of 87.05/15.
    The central bank has repeatedly drained liquidity from the
money market, making it more expensive to hold onto long dollar
positions and shoring up the shilling. The local currency is 0.3
percent weaker against the dollar since the start of 2014.
    On Wednesday, the central bank absorbed 1.7 billion
shillings. 
    "The central bank's draining of excess liquidity might be
the biggest contributor to stopping a bigger slide in the
shilling," Commercial Bank of Africa trader Joshua Anene said.
    "We still feel the shilling remains vulnerable ... as
(dollar) demand still outweighs supply," Anene said.
    Technical analysis of the shilling's 21-day and 50-day
weighted moving averages indicate the currency will continue to
weaken in the short term.
    On the Nairobi Securities Exchange, the benchmark NSE-20
Share Index barely moved, closing up 0.10 point at
4,904.66, points.
    Among the gainers, Equity Bank closed up 5.1
percent at 35.75 shillings, after earlier touching a five-month
high of 36.25 shillings as it continued to be buoyed by robust
results announced last week. 
    Equity, which is Kenya's biggest lender by depositors,
posted a 21 percent jump in pretax profit last week and said it
would launch a telecoms services arm to grow its share in the
fast-growing cell phone-based financial services market.
 
    "With their heavy investment in infrastructure, we see this
as a potential revenue stream going forward to reduce their
reliance on interest income," said Silha Rasugu, research
analyst at Genghis Capital.
    Also rising were shares in Kenya Commercial Bank,
which rose 1.6 percent to close at 48.50 shillings, while
Co-operative Bank rose 0.1 percent to end at 21.50
shillings.
    "KCB and Co-op Bank are likely to attract investor demand
prior to releasing their Q1 results," Rasugu said.
    On the secondary market, government bonds valued at 4.08
billion shillings were traded, up from 2.75 billion 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:
                                    
            
 
 (Additional reporting by Drazen Jorgic; Editing by Richard
Lough and Susan Fenton)

Our Standards:The Thomson Reuters Trust Principles.
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