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5 years ago
UPDATE 1-Kenyan shilling eases on rate-cut bets, shares rally
January 9, 2013 / 2:26 PM / 5 years ago

UPDATE 1-Kenyan shilling eases on rate-cut bets, shares rally

* Markets eye Thursday's policy meeting for direction
    * Shilling down over 3 pct since monetary easing started
    * ARM Cement, Safaricom lead shares up

 (Adds markets close, stocks)
    By Kevin Mwanza
    NAIROBI, Jan 9 (Reuters) - The Kenyan shilling eased
slightly on Wednesday as importers bought dollars in
anticipation of an interest rate cut on Thursday, while shares
rose more than 1 percent to a new 22-month high.
    At the 1300 GMT market close, commercial banks quoted the
shilling at 86.50/70 to the dollar, slightly down from Tuesday's
close of 86.40/60.
    "Customers are being cautious ahead of tomorrow's rate
decision," said John Muli, a trader at African Banking
Corporation.
    The consensus from a Reuters poll of 11 analysts and traders
is for a cut of 100 basis points to 10 percent as the central
bank seeks to drive economic growth by lowering costs of credit.
 
    Lower interest rates normally make it easier for importers
to access credit, driving up demand for dollars that in turn
puts pressure on the shilling.
    The shilling has slipped over 3 percent against the dollar
since policymakers embarked on a rate-easing cycle on July 5.
They have since slashed the central bank lending rate by 700
basis points to 11 percent.
    Traders said the central bank could intervene to support the
shilling through the sale of dollars to commercial banks if it
weakened further.
    The central bank, which has actively mopped up excess
shilling supply since last year, sold an unspecified amount of
dollars directly in the market during Friday's and Monday's
trading sessions. 
    On the Nairobi Securities Exchange, the benchmark NSE-20
share index extended its rally to a seventh straight
session, up 1.3 percent to 4,305.03 points, a new 22-month high.
    Shares in Kenya's second-biggest cement maker ARM 
jumped 5.8 percent to 54.50 shillings each, after touching a 56
shilling record high, as a five-for-one share split last month
made them more affordable to retail investors.  
   ARM's share price has risen nearly 22 percent since books
closed on Dec. 21 for the split.
    "Investors are also optimistic of ARM's future performance
following its expansion into Tanzania, east Africa's second
biggest economy," said Eric Musau, a research analyst at
Standard Investment Bank.
    Safaricom, the country's leading telecoms provider
and the most traded stock on the bourse, closed 3.6 percent
higher at 5.80 shillings, after rallying 6.7 percent to a new
28-month high of 6 shillings.
    The telecommunication firm is expected to perform better in
the full-year ending March mainly due to increased voice
revenues following a 33 percent tariff increase in the year and
its competitive mobile banking platform. 
    In the debt market, the weighted average yield on 182-day
Treasury bills dipped to 8.093 percent at an undersubscribed
auction on Wednesday from 8.100 percent last week.
 
               ...........................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 Beatrice Gachenge; Editing by George
Obulutsa and Stephen Nisbet)

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