Shares halt losing streak, shilling inches up

The Nairobi Securities Exchange trading floor. Kenyan stocks edged up 0.3 per cent on Friday, ending five straight days of losses, as investors saw buying opportunities in blue chips that had dropped during this month's bear run. Photo/FILE  Nation Media Group

By Reuters

Kenyan stocks edged up 0.3 per cent on Friday, ending five straight days of losses, as investors saw buying opportunities in blue chips that had dropped during this month's bear run.

Market participants said the benchmark NSE 20 share index eked out its gains due to foreign investor demand for big firms like brewer EABL, which rose 4 per cent to close at Sh333 per share.

However, they said it was too early to tell if the shares had fully turned a corner following sustained losses this month. The index has fallen 8 per cent in June but is still up about 11 per cent so far in 2013.

"I wouldn't say we have hit the bottom just yet," said Kuria Kamau, an analyst at Kestrel Capital, citing thin volumes during the session.

EABL had lost a quarter of its value since late May, offering a chance for investors to start getting into it again. Tobacco firm BAT Kenya inched up by a third of a percentage point to close at Sh543 per share.

This month's drop in the main index was driven by profit-taking concerns over prospects of tapering of the US stimulus programme and jitters about the government's plan to re-introduce capital gains tax.

READ: Nervous foreign investors cut NSE wealth by Sh100bn

On the foreign exchange market, the shilling edged up against the dollar to close at 85.80/90 from 85.90/86.10 on Thursday, as the market continued to experience thin liquidity, following the tax payments season.

Traders said they were turning their focus on the next rate-setting meeting of the central bank scheduled for July 9, to determine where the bank wants to see the exchange rate.

Inflation rose to 4.91 per cent in June from 4.05 per cent in May, the statistics office said on Friday, but it remained firmly within the government's preferred band of 5-7 per cent.

"Most likely they will leave lending rates on hold," said Ignatius Chicha, head of markets at Citi Kenya.

In the debt market, securities worth Sh18.17 billion were traded this week, up from Sh12.88 billion last week.