NAIROBI: Kenya's shilling weakened on Monday on dollar demand from oil companies and increased liquidity, while mobile telecoms operator Safaricom helped shares recover.
The shilling closed at 91.50/60 to the dollar, compared with Friday's close of 91.25/35.
"It's due to improved liquidity in the market and mid-month (dollar) demand. Oil as usual. They picked a bit, and a bit of other corporates," said John Muli, a trader at African Banking Corporation.
Martin Runo, a senior trader at Chase Bank, said the shilling was also under pressure due to a stronger dollar on global markets.
On Monday, the central bank mopped up 15 billion shillings ($163.84 million) in excess liquidity, the first time it has conducted any mop ups since Jan. 21.
Last week, the shilling was receiving support from a shortage of the local currency after investors bought Treasury bills and bonds, draining local currency from the money markets.
The shilling rose to its strongest levels in more than two weeks on Thursday on hard currency inflows from coffee and tea earnings, non-governmental organisations and foreign direct investment into real estate.
Before that, the shilling had been losing ground in the past 12 months or so, partly undermined by a spate of militant attacks that hit the tourism industry, a vital source of dollar revenues.
Traders forecast the shilling to trade in the 91.30 to 92.00 range against the dollar in the days ahead.
On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 15.53 points or 0.3 percent to close at 5280.72 points, rebounding from Friday's weakness.
The rise was driven largely by Safaricom whose shares rose 1.7 percent to close at 14.80 shillings.
Esther Njoroge, research analyst at Kestrel Capital, said there was no significant news on Safaricom, but that it was being driven by speculation.
"People are just generally positive about Safaricom... there hasn't been any major good news," she said.
Analysts see a better full-year performance for Safaricom, whose pretax profit for the first half ending September 2014 rose by almost a third to 21.1 billion shillings.
On the secondary market, government bonds worth 2.24 billion shillings were traded, up from 1.75 billion shillings traded on Friday.
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