Shilling lifted by tea inflows, as stocks fell
22 August 2013, 10:10
Nairobi - The Kenyan shilling firmed on Wednesday helped by tea exporters selling dollars after Tuesday's auction, while shares dipped for the second straight session.
The shilling was posted at 87.40/50 to the dollar by the 1300 GMT, market close, slightly stronger than Tuesday's close of 87.50/70.
"Some unexpected dollar inflows from the tea sector have supported the shilling," said a trader at one commercial bank.
"But that might not be enough to stop the weakening pressure from importers."
Traders had expected the shilling, which had dipped in the last two sessions, to weaken further if the violence in Egypt, one of the biggest buyer of Kenyan tea, hurt the commodity's earnings this week.
Tea brokers, however, said demand from traders who sell to Egypt came through at the auctions on Monday and Tuesday, despite the political violence in the aftermath of the overthrow of President Mohamed Morsi.
Tea is Kenya's top hard currency earner.
In stocks, the main NSE-20 share index shed 0.2 percent to 4,830.50 points.
East African Breweries (EABL), the second-most capitalised stock on the bourse, fell 2.9 percent to 305 shillings per share, extending its losses after it warned that its full-year net profit would drop by more than a quarter.
The brewer is scheduled to announce its earnings on Friday.
Shares in telecoms operator Safaricom, the most capitalised stock on the bourse, fell 1.8 percent to 8.05 shillings as investor booked profits after it hit all-time high of 8.25 shillings. It has rallied 62 percent so far this year.
"Safaricom could be entering an over-sold position and the price might come down to about 7.50 shillings," said Eric Musau, an analyst at Standard Investment Bank.
In the debt market, yield on the two-year and 10-year Treasury bonds were unchanged in high demand, while the 182-day and 364-day T-bills rates edged up.
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