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UPDATE 1-Mumias Sugar lifts Kenyan shares, shilling stable
February 2, 2015 / 2:51 PM / in 3 years

UPDATE 1-Mumias Sugar lifts Kenyan shares, shilling stable

(Updates with closing rate, shares)
    NAIROBI, Jan 30 (Reuters) - Shares in cash-strapped Mumias
Sugar surged 8.6 percent on Monday to lead Kenyan
stocks higher on news that the government would rescue the
country's leading sugar producer.
    The shilling held steady.
    Mumias' stock has risen since the government said on
Thursday that it would inject 500 million shillings ($5.46
million) and revamp the management of the loss-making producer
of the sweetener in a bid to revive its fortunes.
 
    "There is more headroom for the market," Aly Khan-Satchu, an
independent trader and analyst, said of the stock which has
risen nearly 60 percent this year.
    The benchmark NSE-20 share index closed 0.2 percent
higher at 5,222.76 points and analysts said they expected
further gains in the near-term.    
    Kenyan shares could benefit from foreign funds, looking for
an alternative to the Nigerian markets, which have seen an
exodus of investors after the sharp drop in the price of crude
oil, Satchu said. 
    Lower inflation in Kenya and projected growth in corporate
earnings could also boost stocks, he said.
    Kenya's inflation came in lower than market
expectations at 5.53 percent in the year to January from 6.02
percent a month ago as oil prices fell.    
    In the foreign exchange market, the shilling closed at
91.60/70 per dollar, barely changed from Friday's close of
91.65/75. 
    "There was an issue of liquidity last week that should be
resolved this week, so thereafter you should see shilling lose
ground again," said Chris Muiga, a senior trader at National
Bank of Kenya.
    Bond sales late last month combined with the weekly Treasury
bills auctions caused a shortage of the local currency, offering
temporary support to the Kenyan currency. 
    The shilling has lost ground steadily in the past 12 months
or so, partly driven down by a spate of militant attacks that
hit the tourism industry, a vital source of dollar revenues. The
strength of the dollar in global markets has added pressure.
    "The dollar continues to be strong globally," said Martin
Runo, a senior trader at Chase Bank. 
    "I don't see it going to 92 (shillings to the dollar) so
quickly but that is where we are headed."
    In the debt market, bonds worth 1.1 billion shillings were
traded, slightly down from Friday's volume of 1.2 billion
shillings. 
 
               ...........................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 = 91.5500 Kenyan shillings)

 (Reporting by Edmund Blair and Duncan Miriri; Editing by James
Macharia)

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