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Tuesday, January 25, 2022

Kenyan shilling strengthens on profit-taking, shares rise

Kenyan shilling strengthens on profit-taking, shares riseNAIROBI: Kenya’s shilling firmed on Wednesday as investors sold dollars to take advantage of the local currency’s drop to near 3-year lows and hard currency inflows trickled in aimed at a bond sale due next week.

The benchmark share index recovered after two straight sessions of losses.

The shilling closed trade at 91.85/95, stronger than the previous day’s close of 92.05/15.

“There is a bit of profit-taking and inflows which came in for the bond auction next week,” said John Muli, a trader at ABC Bank.

The central bank will sell a 12-year bond worth up to 25 billion shillings ($ 272 million) on March 25 whose proceeds will be used to improve infrastructure. The bond is favoured by offshore investors as it is exempted from withholding tax.

The shilling fell to its lowest since Nov. 2011 on Monday, under pressure from strong demand for dollars by energy sector importers, forcing the central bank to pump in dollars to stem the volatility.

In the stock market, the share index rose 0.5 percent, or 28.52 points, to close at 5,342.36 points.

The index has only risen twice in the past 11 straight sessions after investors started booking gains from a rally that sent it to a seven year peak early this month.

In the debt market, bonds worth 2.5 billion shillings were traded, up from 779 million shillings in the previous session.

Copyright Reuters, 2015

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