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Kenyan shares end a touch higher, shilling holds ground

14 March 2014, 11:09

Nairobi - Kenya's main share index closed higher on Thursday, lifted by Kenya Airways and telecoms firm Safaricom, while the shilling held steady and dealers forecast it would remain locked in a narrow range.

On the Nairobi Securities Exchange, the main NSE-20 Share Index edged up 24.84 points, or 0.5 percent, to close at 4,960.65 points.

Leading the index higher were shares in telecommunications firm Safaricom, extending gains from Wednesday's session, to close 3.8 percent higher at 12.35 shillings after earlier striking 12.60 shillings, a one-and-a-half month high.

On any given day Safaricom is the most traded stock on the exchange. Equities analysts anticipate strong full-year earnings, a forecast that has attracted both local and foreign investors.

Kenya Airways climbed 3.5 percent to close at 11.85 shillings a share. Earlier in the session it nudged 12.00 shillings.

Ian Gachichio, a research analyst at Kestrel Capital, said local investors were buoyed by the prospect of the national flag carrier launching a budget airline, which will target the region's fast growing middle class.

The budget domestic carrier is expected launch in early April.

At 1300 GMT, commercial banks quoted the shilling at 86.40/60 to the dollar, compared with Wednesday's close of 86.40/50.

Traders said if the central bank (CBK) continued mopping up excess liquidity, as it has done since last week, making it expensive to hold long dollar positions, the shilling would strengthen.

"Demand and supply are well-matched, but excess liquidity is keeping the shilling on the back foot," said Sheikh Mehran, senior trader at Kenya Commercial Bank.

"I think they (central bank) could be coming in again to mop up."

On Thursday, the bank absorbed 6.95 billion Kenyan shillings from the market using repurchase agreements at a weighted average rate of 6.375 percent, a day after draining another 6.1 billion shillings.

The shilling, which has gained 0.35 percent versus the dollar so far this year, is expected to trade in the 86.20 to 86.60 range in coming days, traders said.

On the secondary market, government bonds worth 1.82 billion shillings were traded, down from 2.84 billion shillings traded on Wednesday.

- Reuters


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