×

UPDATE 1-Kenya shilling ends steady vs dlr, stocks up

NAIROBI, Nov 12 (Reuters) - The Kenyan shilling closed steady against the dollar, helped by the euro's recovery against the dollar, while the main index on the Nairobi Stock Exchange rose slightly. At the close of trade at 1300 GMT, commercial banks quoted the shilling at 80.45/55 to the dollar, having recovered from an earlier level of 80.60/70. Earlier on Friday the shilling had lost ground after the dollar strengthened against major currencies. A firmer euro against the dollar typically spurs higher risk appetite among investors, who then choose to hold other currencies like the shilling in favour of the greenback. The shilling strengthens towards the tail end of the year due to higher tourism receipts and the increased flow of remittances by Kenyans working abroad. It hit a three-month high at the end of last week. The Central Bank of Kenya said it was in negotiations with the International Monetary Fund (IMF) for a $497 million loan to shore up its foreign exchange reserves. Traders said there had been no immediate impact on the shilling. Kenya Commercial Bank's Chris Muiga said the IMF loan could be a boost for the shilling but he predicted it would remain on the back foot as long as the central bank continued to buy foreign exchange from the market. "The irony is that we are ignoring our own fundamentals," said Muiga. "The fly in the ointment is central bank," he said, referring to intermittent central bank purchases of foreign exchange. "They come out of the market and the market can chart its own course." The central bank, which stayed out of the market on Friday, says its purchases are not an intervention to keep the shilling weak but are intended to replenish its reserves, which have for months remained below the statutory requirement. The central bank purchased 5.0 million euros on Wednesday . "In the absence of major market moving news, we expect the home unit to continue hovering around the now familiar levels of 80.00 - 81.00 ahead of the weekend," Commercial Bank of Africa said in a market report. On the Nairobi Stock Exchange, the main NSE-20 Share Index gained 0.17 percent to close at 4,595.28. Traders had said earlier in the day there was increased demand for blue chip stocks like East African Breweries (EABL) and Bamburi Cement. EABL closed trade at 217.00 shillings from 213.00 shilling on Thursday's close, while Bamburi closed at 202.00 shillings, up from 200 shillings a day before. Cement maker Athi River Mining also rose 2.34 percent to 175.00 shillings from 171.00 shillings on Thursday. It posted a 12.6 percent rise in nine-month pretax profit to 762 million shillings ($9.5 million). On the stock exchange, corporate and government bonds worth 2.02 billion shillings were traded on Friday, from 1.43 billion shillings a day before. Most activity revolved around 15-year bonds, which traded at yields ranging from 5.55 percent to 9.00 percent. Also on Friday, central bank began selling a five-year bond worth up to 12 billion shillings ($148.9 million), the proceeds of which will go towards budgetary support. The bond is due to start secondary trading on the exchange on Nov. 30. ...........................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 ...........................African economic news SPEED GUIDES: (Reporting by Helen Nyambura-Mwaura and George Obulutsa) (For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com) Keywords: KENYA MARKETS/ (Email: nairobi.newsroom@reuters.com; tel: +254202224717) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.