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UPDATE 1-Kenya shares drop more than 1 pct, shilling up

Mon, 19th Mar 2012 15:40


By Beatrice Gachenge and George Obulutsa

NAIROBI, March 19 (Reuters)
- Kenyan shares fell 1.33

percent on Monday, dragged down by losses in shares of Equity

Bank and national carrier Kenya Airways,

while the shilling firmed 0.5 percent against the dollar.

The Nairobi Securities Exchange's main NSE-20 Index

slid to 3,317.62 points as Equity Bank closed 6.5 percent lower

at 17.30 shillings a share, weighed on by profit-taking.

Kenya Airways, which touched a 7-1/2 year low during the

session, closed down 1.3 percent at 14.95 shillings a share

after hitting a low of 14.75 shillings earlier in the session, a

level last seen in October 2004 when it traded at 14.00

shillings, Thomson Reuters data showed.

Traders attributed the fall to a $250 million cash call,

which opens on April 2, with the offer priced at 14 shillings

per share.

'On Equity it's profit-taking, and KQ (Kenya Airways) it's

purely rights (issue),' said George Bodo, an analyst at Apex

Africa.

'I think it (Kenya Airways) probably will be approaching

the pricing of the rights pricing level. There could be a lot of

selling pressure which could be short-lived. I think it will be

temporary.'

In the currency market, commercial banks posted the shilling

at 82.50/82.70 per dollar at the 1300 GMT close of trade, up 0.5

percent from Friday's close of 83.00/20.

Traders said exporters had been converting their dollar

earnings into shillings, thus boosting the local currency, and

they predicted it would get further support from the debt

market.

'Offshore interest in government securities with the

one-year bond sale, will help the shilling strengthen,' said

Sameer Lagadia, head of trading at Diamond Trust Bank.

High yields on government debt in the region's biggest

economy have helped to prop up the shilling, which is up 3.1

percent against the dollar so far this year.

Heavy demand is expected to help to lower rates on a

one-year Treasury bond to be auctioned on Tuesday. The Central

Bank of Kenya plans to offer 10 billion shillings ($120.1

million) worth of the security, whose coupon will be determined

by the market.

Later in the week, the central bank will sell 91- and

182-day Treasury bills worth 7 billion shillings.

Some traders said a liquidity squeeze due to quarterly tax

payments by corporations, was also offering support to the

currency. Commercial banks were also trimming dollar positions

to make that shilling commitment to clients.

In the secondary bond market, government and corporate bonds

worth 2.28 billion shillings were traded in Monday's session,

down from 2.42 billion shillings traded previously.

...........................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

...........................African economic news

.................................NSE-20 Share Index

.................................NSE All Share Index

...........................FT NSE Kenya 15 Index

.......................... FT NSE Kenya 25 Index

SPEED GUIDES:





($1 = 83.2500 Kenyan shillings)



(Editing by Yara Bayoumy; editing by Stephen Nisbet)

Keywords: KENYA MARKETS/

(nairobi.newsroom@reuters.com)(Tel: +254 20 2224717)

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