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UPDATE 1-Kenyan shilling falls vs dollar, shares extend rally
September 13, 2012 / 4:20 PM / 5 years ago

UPDATE 1-Kenyan shilling falls vs dollar, shares extend rally

* Shilling outlook bearish after rate cut
    * Shares extend rally to a third straight session

 (Recasts with markets close, stocks)
    By Kevin Mwanza
    NAIROBI, Sept 13 (Reuters) - The Kenyan shilling 
weakened against the dollar on Thursday, undermined by oil
sector importers buying greenbacks, while stocks rallied for a
third straight session.
    At the close of market, the shilling was posted at 84.30/50
per dollar, 0.2 percent weaker than Wednesday's close of
84.10/30.
    "The dollar is slightly higher due to an up tick of demand
from the oil guys," said Dickson Magecha, a trader at Standard
Chartered Bank.
    Technical analysis of the shilling's 14-day and 50-day
weighted moving average shows that it is likely to keep
weakening in the short term.
    Traders said last week's 350 basis points rate cut to 13
percent is seen posing a downside risk to the local currency, as
it was likely to make credit cheaper for importers and easier
for commercial banks to hold long dollar positions.
    The shilling is up 0.7 percent in the year to date, helped
by a tight monetary stance adopted by policymakers for most of
this year.
    "We are bearish on the shilling despite some inflows into
the equities. Interest rates are low, cost of funds is cheaper
creating room for the shilling to weaken," said Duncan Kinuthia,
head of trading at Commercial Bank of Africa.
    On the Nairobi Securities Exchange, the main NSE-20 share
index rallied for a third straight session, up 0.3
percent to 3,953.8 points, led by shares in Kenya's largest oil
firm KenolKobil.
    KenolKobil extended its gains by 4.9 percent to 15 shillings
as demand from the previous session carried over shrugging off
news that a Kenyan court had temporarily blocked a take over bid
Swiss-based Puma Energy's. 
    Cooperative Bank shares rose 1.7 percent to 11.95
shillings, while shares in Kenya Commercial Bank, the
biggest bank by assets, rose 1 percent to 18 shillings.
    Banking shares have rallied this week as investors grew
optimistic that credit demand will start to improve following a
record rate cut last week.
    In the debt market, yield on the benchmark 91-day Treasury
bills fell to 7.515 percent at an under subscribed
auction on Thursday, down from 7.808 percent last week.
 
    Government and corporate bonds worth 5.5 billion shillings
were traded, up from 4.5 billion shillings 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:
                                    
            
 
 (Editing by George Obulutsa/Ruth Pitchford)

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