Author Topic: Pre-Valentine’s Day Flower Earnings Help Kenya Shilling  (Read 557 times)

ChannelsTV

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The Kenyan shilling firmed slightly on Wednesday, helped by dollar inflows from flower exports before Valentine's Day, while shares rallied for the 11th straight session.
At the 1300 GMT close, commercial banks posted the shilling at 87.20/40 to the dollar, slightly firmer than Tuesday's close of 87.30/40. Sheikh Mehran, a senior trader at Kenya Commercial Bank, said flower exporters were receiving their payments in dollars in the run-up to Valentine's Day on Thursday. Flower exports earned the country 44.51 billion shillings ($508.69 million) in 2011. Together with fruit and vegetables, the horticulture sector is one of the largest sources of hard currency for the east African nation, bringing in a total of 91.6 billion shillings in that same year. On the money markets, the weighted average interbank lending rate climbed to 9.4 percent on Tuesday, from 8.8 percent on Monday.

The rate has risen for 20 straight sessions from a low of 5.43 percent on Jan. 15, thanks to the central bank's efforts to cut pressure on the shilling from the dollar by tightening liquidity. The shilling has been under pressure this year from importers buying dollars ahead of a presidential election on March 4, and it is 1.3 percent down against the dollar in the year-to-date. The last presidential vote in 2007 was followed by ethnic unrest that hurt the country's economy, and investors are concerned the same might happen this time around. At the Nairobi Securities Exchange, the main share index rose for the 11th straight session, up 0.3 percent to 4,648.09 points. The rally has mainly been driven by investors buying stocks,especially from banks, ahead of the release of full-year earnings, which they expect to be strong due to falling interest rates and lower inflation reading last year. "Banks are receiving a lot of interest from investors at the moment," said Faith Atiti, an analyst at NIC Securities, adding that the rally could be slowing down as companies start releasing their results. Co-operative Bank of Kenya rose 1.3 percent to 14.05 shillings a share, while Equity Bank, the country's biggest bank by customers, added 0.9 percent to 27.75 shilling per share. However, Barclays shares dropped 2.1 percent to 16.15 shillings after it posted a lower-than-expected 8 percent rise in its full-year pre-tax profit to 13.02 billion shillings. In the debt market, the yield on Kenya's 182-day Treasury bills rose to 8.502 percent at auction on Wednesday, from 8.450 percent last week. Yields on the Treasury bills have been edging higher for the last two weeks lifted by the central bank tightening liquidity to support the shilling. In the secondary debt market, bonds worth 256.6 million shillings were traded, down from 1.35 billion shillings on Tuesday. ($1 = 87.5000 Kenyan shillings)

Via: ChannelsTV

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