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Kenyan stocks close higher, shilling steady

13 March 2014, 08:35

Nairobi - Banking stocks pushed Kenya's main share index higher on Wednesday, with investors encouraged by strong earnings results and upcoming dividend payments on banking shares.

The shilling held steady.

On the Nairobi Securities Exchange, the main NSE-20 Share Index closed up 19.97 points, or 0.41 percent, at 4,935.81 points.

Financial institutions like KCB Bank Group(KCB), CFC Stanbic Holdings and Co-operative Bank all saw solid gains.

Telecoms firm Safaricom, which is typically the most traded stock on the bourse, also rose.

KCB and CFC Stanbic both posted healthy growth in their full-year pretax profits for 2013, while Co-operative Bank is expected to follow the same trend.

CFC Stanbic jumped 4.6 percent to close at 114 shillings, while KCB ended the session 1.1 percent higher at 46.25 shillings.

Co-operative Bank was up 0.53 percent to finish trade at 18.90 shillings a share.

"What we have generally seen is some upward demand for banking counters. People coming in to take positions in preparation for the dividend payments. Some of them are closing their books between March and May," Daniel Kuyoh, research analyst at Kingdom Securities, said.

"For the banks that have released results we saw a positive performance. Some of the banks performed better than expected."

Safaricom ended the session up 0.8 percent at 11.90 shillings after jumping 2.5 percent to near a one-and-a-half month high of 12.10 shillings.

Safaricom has said it has entered into talks to buy assets of another telecom firms Essar Telecommunications, and analysts say that and expectations for robust full-year earnings, have made the stock attractive to investors.

"We generally should see that trend continue in the next trading session," Kuyoh said.

At the close of foreign exchange trade at 1300 GMT, commercial banks quoted the shilling at 86.40/50 to the dollar, barely changed from Tuesday's close of 86.30/40, and from 86.45/65 where it traded earlier in the day.

Andlip Nazir, senior trader at I&M Bank, said central bank liquidity mop-ups throughout the week have helped the shilling but dollar demand was offsetting some of that support.

"We are seeing demand from manufacturing. I think it should pick up from next week," Nazir added.

The central bank was in the market and mopped up 6.1 billion shillings at a weighted average rate of 6.276 percent. It had sought to mop up 10 billion shillings, central bank data showed.

Dollar sales by the agriculture sector were also expected to boost the currency of east Africa's biggest economy.

"We anticipate the shilling to remain well supported as inflows from the farm sector continue to trickle into the market," Commercial Bank of Africa said in its daily report.

The shilling, which has gained 0.2 percent versus the dollar so far this year, is expected to trade in the 85.90 to 86.90 range in coming days.

On the secondary market, government bonds valued at 2.84 billion shillings were traded, compared with 1.99 billion shillings traded on Tuesday.

- Reuters


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