Kenya shares fall to one month low
25 November 2011, 09:41
NAIROBI Nov 24 (Reuters) - Kenyan shares slipped to a
one-month low on Thursday, dragged down by worries over the
impact of high interest rates on banks, while the shilling
was barely changed against the dollar.
The main NSE-20 Share index finished nearly 1
percent down, losing 32.07 points to 3,288.70 and close to the
3,277.50 points where it closed on Oct. 14.
Traders blamed the fall in stocks on banks as the market
worried about the impact of higher lending rates, which shot up
in October after policymakers shifted to a more hawkish stance
to tame inflation and volatility in the currency.
"The high interest rates seem to be affecting banksthanks'
businesses and defaults are likely to go up," said a trader with
a leading investment bank.
Barclays Bank of Kenya fell 4.6 percent to end at
12.50 shillings per share, Equity Bank closed 1.3
percent lower at 18.75 shillings a share while Kenya Commercial
Bank, the largest bank by assets, shed 2.4 percent to
close at 16.05 shillings.
In the foreign exchange market commercial banks posted the
shilling at 90.15/25 to the dollar at the 1300 GMT close of
trade, barely moved from the previous day's close of 90.20/50.
Traders said the shilling was poised to strengthen further
against the dollar in the weeks ahead due to a liquidity crunch
in the market that has sent rates soaring and supported a 15
percent gain for the Kenyan currency since mid-October.