NAIROBI: Inflows of dollars ahead of government debt auctions supported the Kenyan shilling against the dollar on Tuesday and the finance minister said the central bank must stop the currency getting much stronger.
The stock market extended its rally to a sixth straight day as investors anticipated a positive set of company results. Two large companies posted a jump in profits after the close.
At the 1300 GMT market close, commercial banks quoted the shilling at 82.75/95 against the dollar, barely changed from Monday's close of 82.70/90.
Kenya's Treasury has told the central bank to prevent the shilling appreciating beyond the 82 per dollar level or else exporter revenues will be hurt, the country's acting finance minister told Reuters after the market close.
Local currency traders said they had seen the central bank looking to buy dollars around the 82-82.50 level on Tuesday.
"There is some end-month dollar demand which is evenly matched by the good flows from the debt market. That's why we're stuck at this level," said Sameer Lagadia, head of trading at Diamond Trust Bank.
"We still have a lot of dollar supply coming through from bond buyers and interbank selling. The shilling will remain bullish despite the lack of tea inflows," Lagadia said.
A disruption of the tea auctions this week over a tax dispute had threatened to cut off dollar inflows from the top exchange earning sector, but was resolved in time and an auction is scheduled for Wednesday.
The central bank's raising of interest rates to 18 percent has drawn foreign investors to Kenyan debt, helping turn round one of the emerging world's worst currency collapses last year.
In stocks, investors betting on impressive financial results and high dividend payouts by companies lifted the benchmark NSE-20 Share Index 0.5 percent to 3,275.87 points.
"Strong performances posted by companies continued to elicit positive sentiments from investors who are out to book dividends and quick capital gains," said Ronald Lugalia, an analyst at Afrika Investment Bank.
KenolKobil, the largest oil marketer by sales, posted a 74 percent jump in full-year pretax profit to 409 billion shillings, while the country's largest power producer, KenGen showed a 33 percent rise in profits to 1.7 billion.
Both companies posted their results after trading closed. KenolKobil ended up 2.7 percent to 11.55 shillings, as KenGen fell 1.3 percent to 7.40 shillings during the session.
British American Tobacco soared to touch an all-time high of 320 shillings a share after investors scrambled for the stock attracted by a bumper final dividend of 27 shillings. The stock closed 5 percent higher at 314 shillings.
In the debt market, government bonds worth 5 billion shillings ($60.5 million) were traded, up from 1.5 billion shillings on Monday.
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