Connect to share and comment

UPDATE 2-Kenya shilling falls 1 pct on delayed election results

PlacardEnlarge
(Globalpost/GlobalPost)

* Shilling falls for the first time in nine sessions * Anxiety grips investors as vote counting drags on * Banks stocks lift main share index (Adds markets close, stocks) By Beatrice Gachenge and Kevin Mwanza NAIROBI, March 6 (Reuters) - Kenya's shilling weakened 1 percent against the dollar on Wednesday due to concerns that delays in the announcement of presidential election results would prompt rivals to challenge the outcome. In stocks, the benchmark index rose for the second session after the vote, as investors focussed on expectations that listed firms will continue to perform strongly helped by robust economic growth. At the 1300 GMT market close, commercial banks quoted the shilling at 86.60/80 to the dollar, 1 percent weaker than 85.75/95 at Tuesday's close. The shilling had firmed for seven straight sessions to an 18-week high to 85.10 per dollar on Tuesday, a day after voting passed off peacefully, but gave up those gains when it became clear the result would not emerge swiftly. "We thought we would have the results within 48 hours," said Duncan Kinuthia, head of trading at Commercial Bank of Africa said. "In the absence of any news, people are not going to sit pretty." Counting since Monday's vote has been slow, and a new electronic voter system has been plagued by hitches, leading to complaints by political parties and anxiety among voters fearful that a flawed process could lead to another violent dispute. Provisional results show Uhuru Kenyatta, a politician wanted for crimes against humanity in The Hague over post-poll violence in 2007 that left more than 1,200 people dead, was ahead of Prime Minister Raila Odinga. But almost 60 percent of polling stations have yet to report. However, the shilling is only down 0.6 percent so far this year, after growing confidence about a relatively peaceful election outcome helped put it among the region's best performers. "If the volatility is too much, the central bank will be forced to step in," said a senior trader at one commercial bank. The central bank has been intervening in the market by draining excess shillings via repurchase agreements and occasionally selling dollars directly to the commercial bank to stem a sharp fall of the shilling. The unrest in 2007/8 hit the Kenyan economy hard and sent shockwaves through neighbouring countries which rely on its Mombasa port as a gateway for trade in the region. In Uganda, Kenya's largest trade partner in the region, the shilling weakened slightly on Wednesday, as investors concerned abou the Kenyan delays bought dollars. At the Nairobi Securities Exchange, the main NSE-20 share index rose 0.3 percent to 4,546.83 points led by bank stocks. Aly Khan Satchu, an independent analyst, said investors were positive on Kenya's economic outlook and betting that the delayed elections tally will not result in any disturbance. "Equity investors are prepared to take the shilling discount in order to get in," Satchu said. The bourse's bullish tone "is evidenced in today's performance which has looked through the election delay." Equity Bank, the country's biggest bank by customers, jumped 5.3 percent to a more than two-year high of 30 shillings a share, extending a four straight session rally after it reported a 36 percent rise in pretax profits. Standard Chartered Bank, climbed 4.3 percent to 291 shillings a share ahead of its full-year results expected next week. "Strong results and improved dividends may sustain the uptrend in share prices," said Ronald Lugalia, an analyst at Africa Investment Bank. In the debt market, the weighted average yield on Kenya's 364-day Treasury bills rose to 12.542 percent at auction, while the 182-day bills interest rate rose to 9.697 percent. In the secondary debt market, bonds worth 1.66 billion shillings ($19 million) were traded, up from 35.5 million shillings on Tuesday. ...........................Shilling spot rates .....................Shilling forward rates .......................Cross rates ..................................Local contributors .......................Central Bank of Kenya Index .....................Kenyan Bonds contributor pages ...............Treasury bill yields ..................Central bank open market operations .........................Horizontal repo transactions , ................Daily interbank lending rate .............................Kenya Bond pricing ..................Real time Africa economic data <ECI & AFR> ...........................African economic news .................................NSE-20 Share Index .................................NSE All Share Index ...........................FT NSE Kenya 15 Index .......................... FT NSE Kenya 25 Index SPEED GUIDES: ($1 = 85.5000 Kenyan shillings) (Editing by Ruth Pitchford)

http://www.globalpost.com/dispatch/news/thomson-reuters/130306/update-1-kenya-shilling-weakens-election-jitters