Kenyan shilling weakens against dollar, shares fall again

 

A man counts bank notes. The Kenyan shilling weakened on Friday, hurt by greater corporate demand for the dollar, while shares fell again as investors waited for Prime Minister Raila Odinga to file a Supreme Court petition contesting the presidential poll outcome. Photo/File  

By Reuters

Posted  Friday, March 15  2013 at  18:26

The Kenyan shilling weakened on Friday, hurt by greater corporate demand for the dollar, while shares fell again as investors waited for Prime Minister Raila Odinga to file a Supreme Court petition contesting the presidential poll outcome.Commercial banks posted the shilling at 85.45/65 to the dollar at the 1300 GMT market close, weaker than Thursday's close of 85.30/50.Traders said they expected the shilling to trade in the 85.20-85.80 range in coming sessions, noting that investors were waiting for the outcome of a Presidential election result petition challenging Uhuru Kenyatta's win in a tightly fought election on March 4."With the political uncertainties still looming in the air, we expect market players to trade cautiously," a Commercial Bank of Africa report said.Odinga, a defeated presidential contender and the outgoing prime minister, is expected to file a petition challenging the presidential result on Saturday.

Despite the uncertainty, there has been no repeat of the previous elections' deadly violence that sent the region's biggest economy into a tailspin.Odinga has called for calm while he takes his case to court and has said he will accept the final ruling.Demand for the dollar, mainly from oil importers, has been subdued this week, helping stabilise the local currency, which has risen half a per cent so far this year.The shilling has gained 0.7 per cent since the presidential result was announced on Saturday, lifted by a return of business confidence and reduced dollar demand by importers who had accumulated long positions in the run-up to the election.In stocks, the main NSE-20 share index fell 1.2 per cent to 4,774.12 points, extending its losing streak to a third straight session.Kenyan shares surged 7 per cent in the first two session of after the elections results were announced, but have since retreated 4.3 per cent as investors took profit on the rally."Bidding levels remain weak, pulling most stocks off the recent highs," said Faith Atiti, an analyst at NIC Securities.Equity Bank, the country's biggest bank by customers, dropped 3.2 per cent to 30 shilling per share while leading telecom service provider Safaricom fell 2.4 per cent to 6.15 shilling.The two stocks were the most traded during Friday's session.In the debt market, bonds worth 3.67 billion shillings ($43 million) were traded, down from 1.25 billion shillings on Thursday.

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