NAIROBI: The Kenyan shilling weakened on Tuesday, undermined by dollar demand from the energy, telecommunications and manufacturing sectors, while Centum Investments helped lift the stock market.
At the close of trade at 1300 GMT, commercial banks quoted the shilling at 91.30/40 to the dollar, from Monday's close of 91.20/30. During the session the shilling touched 91.35/45, a new more than three-year low.
"At the moment demand surpasses any supply we might be getting for dollars in the market. So the current trend is still a bearish one for the shilling," said Nahashon Mungai, a trader at Kenya Commercial Bank.
Traders expect the shilling, which has lost 0.7 percent this month, to trade in the 91.10 to 91.50 range in coming days.
"We have seen heavy demand from most of the players," said Sheikh Mehran, head of trading at I&M Bank, referring to demand from businesses including manufacturing and construction firms. Others noted demand from energy and telecoms companies.
On the Nairobi Securities Exchange, the main NSE-20 Share Index closed up 16.08 points, or 0.3 percent, at 5,138.07 points.
Centum Investments rose 4.8 percent to end at 65.50 shillings a share, below a session high of 68.50 shillings. Centum is part of a consortium that won a government tender to build a 1,000-MW, coal-fired power plant.
A challenge by a rival bidder for the award was dismissed on Tuesday, freeing the consortium to start work.
"It's the coal deal that was approved today, so the market has positively reacted to the news," said Virginia Wairimu, research analyst at Suntra Investment Bank.
On the secondary market, government bonds valued at 2.97 billion shillings ($32.5 million) were traded, up from 1.87 billion shillings on Monday.
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