March 14, 2014 / 2:50 PM / 3 years ago

UPDATE 1-Central bank mop-ups keep Kenya shilling rooted to the spot

(Adds shilling close, shares)
    By Richard Lough
    NAIROBI, March 14 (Reuters) - The Kenyan shilling 
held at 86.40/50 on Friday as the central bank mopped up excess
liquidity, deterring banks from building up dollar positions.
    The Central Bank of Kenya absorbed liquidity during four of
this week's five trading sessions, draining a total 20.5 billion
shillings from the money market, central bank data showed. 
    Soaking up liquidity makes it holding long dollar positions
more expensive. That in turn helps strengthen the shilling.
    Market participants said the central bank operations and
hard dollar inflows into the stock market had offset dollar
demand from energy companies.
    "We'll keep an eye on the central bank mopping up," said
Andlip Nazir, senior trader at I&M Bank. "When the central bank
is in, banks will generally slow down in their building up of a
position on the dollar."
    "But we'll see some good (dollar) demand coming in from
mid-next week," Nazir added.
    The central bank on Friday took 3.45 billion shillings out
of the money market at a weighted average rate of 6.370 percent.
 
    Meanwhile, the Nairobi Securities Exchange benchmark NSE-20
Share Index edged up 0.5 percent to close at 4,983.83
points - leaving it 1.6 percent higher than last Friday's close.
    Kenya Commercial Bank, the country's biggest by
assets, and leading telecoms company Safaricom 
dominated trading, with KCB accounting for a third of all shares
traded.
    Safaricom shares fell 2.4 percent to 12.05 shillings a
share, but the stock remained just shy of a record high of 12.80
shillings struck on Jan. 24, as investors bet on bumper
full-year profits. KCB shuffled sideways, holding at 46
shillings.
    "The expectation is that Safaricom is going to have stellar
profits," said an analyst at a leading Nairobi brokerage,
pointing to the company's 38 percent jump in pretax profits in
the first half of its financial year, which ended in September.
 
    Trades on KCB were driven by investors taking positions
before the company closes its books in May, the analyst said.
KCB announced a dividend of two shillings a share last month.

 ...........................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 = 86.4800 Kenyan Shillings)

 (Additional reporting by James Macharia; Editing by Drazen
Jorgic, Larry King)

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