News

The Kenyan shilling strengthened to a two-month high, boosted by dollar inflows into local stocks and bonds from investors abroad.
At the close of trade on Monday, Commercial banks posted the shilling at 102.10/20 per dollar, up from 102.40/50 at last Friday’s close, its strongest level since August 17.


The currency was receiving support from inflows ahead of an October 21 auction of an amortized on-year Treasury bond, and more broadly from its weekly Treasury bills auctions, said a trader at a Commercial bank.
“We have seen dollar inflows from foreign buyers coming in for the bond,” the trader said.  “And, later in the week, as long as the T-bills continue to be this high, the shilling will continue to gain.”
In recent weeks traders have reported growing dollar inflows from foreign investors attracted by rates on government Treasury bills of more than 20 per cent, far above what Kenya usually pays short-term debt.
The spike in rates has been caused by the Central Bank’s monetary tightening in June.
In the stock market, the benchmark NSE-20 share index rose 0.75 per cent to close at 3,930.32 points, as investors sought bargains after recent weakening.  Like other frontier markets, the Nairobi bourse has been under pressure for most of this year, as investors sought safety ahead of a potential interest rate rise in the United States.
Shares, especially banks, fell to new lows last week after the Central Bank put a mid-sized lender, Imperial Bank, into receivership, spooking investors.
The Central Bank said the Imperial Bank incident “does not present a systematic concern for the sector,” noting the lender represented just 1.8 per cent of Kenya’s banking system.
Equity Bank dropped eight per cent last week on Wednesday to Kshs.40 share, but on Monday closed trading at Kshs.41.25.
Standard Chartered Bank fell 2.9 per cent to Kshs.200 and is now at Kshs.203 and Kenya Commercial Bank shed 4.7 per cent to Kshs.40.25 and closed at 42.50 on Monday.
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