UPDATE 1-Kenyan shilling firms, Safaricom helps lead shares higher

* Shilling partly recovers after two-session slide * Tight liquidity, bond sale seen supporting shilling * Safaricom hits new all-time high on foreign buying By Kevin Mwanza NAIROBI, Oct 3 (Reuters) - The Kenyan shilling firmed onThursday as banks sold a broadly weaker dollar and importerdemand for the U.S. currency slowed down, while Safaricom helped drive stocks to a six-week high. Commercial banks quoted the shilling at 86.50/70 perdollar at the 1300 GMT market close, stronger than Wednesday'sclose of 86.70/90. "The shilling is strengthening a bit on reduced customerdollar demand and banks profit taking on the last two sessions'weakness," said John Muli, a trader at African BankingCorporation. Muli said tight shilling liquidity in the money market due to companies paying the latest tax instalment and aglobally weaker dollar, could help the local currency strengthenfurther. Traders said inflows from foreign investors buying anextended 12-year infrastructure bond would also support theshilling in coming days. The bond issue was oversubscribed at an auction last monthbefore the central bank offered it again through a tap sale forthe next three months to raise an additional 16 billionshillings ($184.4 million). On the stock market, the main NSE-20 share index inched up 0.2 percent to 4,838.07 points, a level last reachedon Aug. 20. Shares in east Africa's biggest telecoms firm Safaricom rose1.7 percent to 8.90 shillings each. They touched a new all-timehigh of 9 shillings during the session. "There is a lot of appetite for Safaricom from foreigninvestors," said Moses Waireri, an analyst at SterlingInvestment Bank. "But it could be entering an overbought position," he added. Safaricom, which is 40 percent owned by Britain's Vodafone, has rallied 76 percent this year, mainly on foreigninvestors buying it on bets it will give a higher dividend thisyear. The telecoms firm has a yield of 4 percent. The weighted average yield on Kenya's 91-day Treasury bills rose to 9.360 percent at auction from 9.109 percentlast week. On the secondary debt market, government bonds worth 5billion shillings ($57.84 million) were traded, down from 8.2billion on Wednesday. ...........................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: