RTRS: UPDATE 1-Kenya shilling steady vs dollar, shares flat
* Shilling seen weakening on lower rates
* Shares ease as Safaricom goes ex-dividend
(Adds markets close, stocks)
By Kevin Mwanza and Beatrice Gachenge
NAIROBI, Sep 14 (Reuters) - The Kenyan shilling ended
steady against the dollar on Friday, but was seen weakening as
falling interest rates make it cheaper for commercial banks to
hold long dollar positions, while shares halted a three-session
rally.
The shilling was posted at 84.30/50 per dollar at the 1300
GMT market close, unchanged from Thursday's close.
"There is a bearish tone on the shilling. ... as yields fall
it's less attractive to hold the currency," said Raphael Owino,
a senior trader at Commercial Bank of Africa.
Yields on the benchmark 91-day Treasury bill fell
to 7.515 percent on Thursday even though demand was low, from a
high of close of 21 percent at the beginning of the year.
Kenya's central bank slashed its key lending rate by 350
basis points to 13 percent this month and economic analysts
expect further loosening.
Chris Muiga, a senior trader at Kenya Commercial Bank, said
it would likely be four to six months before growth in imports
as a result of cheaper credit translated into an uptick in
inflationary pressure.
Traders said they expected the central bank to continue
mopping up liquidity through repurchase agreements and use other
open market tools to support the shilling.
On Friday, the central bank which sought to mop up 16
billion shillings ($190 million), received bids worth 13.48
billion shillings and accepted them all.
In stocks, the main NSE-20 share index was barely
changed, slipping 0.30 point to 3,953.53 points, while the
Nairobi All Share Index eased 0.7 percent to 86.61
points.
"Investor appetite for stocks remain strong going by the
increased tradable volumes in the market and investor interest
in the banking sector," said Ronald Lugalia, an analyst at
Afrika Investment Bank.
Safaricom, the leading mobile operator and one of
the most capitalised stock, fell 4.8 percent to 3.65 shillings
after its shares started trading without a dividend.
Longhorn, publisher, which issued a profit warning
in the previous session, shed 8.5 percent on thin volumes to
15.10 shillings.
In the debt market, 4.8 billion shillings worth of
government and corporate bonds were traded, down from 5.5
billion shillings on Thursday.
