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Safaricom helps shares higher, shilling stable

01 September 2014, 09:09

Nairobi -  Safaricom led Kenyan shares higher on Friday after parliament approved its plans to construct a national security and surveillance system, while the shilling was flat.

Shares in Safaricom, Kenya's largest mobile phone firm with a heavy weighting on the benchmark NSE-20 share index, rose 1.5 percent to close at 12.95 shillings after touching an intra-day high of 13.10 shillings, traders said.

The government has picked Safaricom to install the security and surveillance system worth 14.9 billion shillings ($168.55 million) in a country that has faced militant attacks, including the deadly raid on the Westgate shopping mall in the capital in September last year, leaving at least 67 people dead.

"There was a lot of foreign buyer interest in Safaricom after their security system was approved by parliament," Agnes Achieng, research analyst at Sterling Investment Bank, said.

National Bank of Kenya added 2.7 percent to 28.75 shillings after reporting a 32 percent jump in first-half pretax profit due to a rise in net interest income.

The benchmark NSE-20 share index closed 0.9 percent higher at 5,139.39 points, near seven-month highs reached at the start of this month.

In the debt market, bonds worth 680 million shillings ($7.69 million) were traded, up from 2.9 billion shillings worth of transactions in the previous session.

In the currency market, the Kenyan shilling was steady against the dollar, although traders said the currency could come under pressure from importers buying dollars to pay their end-month bills.

The shilling closed at 88.40/50 per dollar, barely changed from Thursday close of 88.35/45.

"It has been quiet, corporates have stayed away and not bought dollars, the end-month demand is likely to have dissipated," said Sheikh Mehran, senior trader at I&M Bank.

Traders said the local currency was expected to trade between 88.20 and 88.50 in the coming days, with the central bank showing the market it is willing to intervene to prop it up.

The central bank pumped an unspecified amount of dollars into the market on Tuesday, lifting the shilling from 88.80/90, its lowest level since December 2011.

The shilling has lost some 2.4 percent against the dollar so far this year.

- Reuters

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