Kenya shilling steady, main share index edges up

The shilling was steady at 86.50/70 to the dollar January 10, 2014. Traders expect it to firm up helped by dollar sales from the agriculture sector and lower demand for the US currency. Photo/FILE 

By Reuters

In Summary

• Traders expect the shilling to firm up in the coming days helped by dollar sales from the agriculture sector and lower demand for the US currency.
• On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 15.17 points, or 0.3 per cent to 5,059.52 points, a fresh one-month high.

The Kenyan shilling was steady on Friday, and traders said they expected it to post gains in the days ahead, while the main share index edged higher.

At the close of trade at 1300 GMT, commercial banks quoted the shilling at 86.50/70 to the dollar, the same as Thursday's close.

It had earlier strengthened to 86.40/60, helped by dollar sales from farm exports.

Traders expect the shilling to firm up in the coming days helped by dollar sales from the agriculture sector and lower demand for the US currency.

"We saw some inflows coming through from the agriculture sector," said Sameer Lagadia, head of trading at Diamond Trust Bank.

Traders said they forecast the shilling to trade in the 86.30-87.00 range per dollar in the next few days, with a bias towards gaining more ground until the end of the month when importers are expected to come in and buy dollars.

"Demand is at the minimum," said Peter Mutuku, head of trading at Bank of Africa.

"There is also the effect of the sovereign bond that is coming up. I think that is also psychologically supporting the shilling."

Kenya plans to start marketing a $1.5 billion Eurobond this month. Plans to launch a Eurobond in 2007 were scuttled by violence, triggered by a disputed election, which killed more than 1,200 people and displaced about 350,000 from their homes, and by the global financial crisis.

READ: Treasury sets end month for sale of Sh172bn Eurobond

At the bourse

On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 15.17 points, or 0.3 per cent to 5,059.52 points, a fresh one-month high.

Telecommunications firm Safaricom, which is typically the heaviest traded, led the index higher.

READ: NSE crosses 5,000 points helped by Safaricom price surge

It ended the day 0.4 per cent up at Sh11.75 a share after jumping 2.1 per cent to an intraday high of Sh11.95.