Business news feedKenyan shilling, stocks seen gaining further


Posted on Thursday, 04 April 2013 15:35

Kenyan shilling, stocks seen gaining further

April 4, 2013, 5:36 pm

By Kevin MwanzaNAIROBI (Reuters) - The Kenyan shilling is expected to add to recent gains as investors unwind dollar hedge positions taken before the elections, while importers are holding back orders in the hope of a stronger shilling."We could see the shilling strengthen... Guys who had hedged before the elections are converting their dollars into shillings," said Dickson Magecha, a trader at Standard Chartered Bank.The shilling held its latest gains on Thursday, quoted at 84.70/90 per dollar at the 1300 GMT close, barely changed from Wednesday's close of 84.65/85. Stocks fell for the second straight session, led by banking shares, but analysts saw further gains in the near-term horizon.The shilling firmed 0.7 percent in the last three sessions after the Supreme Court upheld Uhuru Kenyatta's March 4 presidential election win in a largely peaceful vote."Importer demand seems to have slowed down, with the conviction that there could be better prices in the near future as the shilling's fortune looks bright," said Commercial Bank of Africa in a daily note.The shilling has risen 1.3 percent against the dollar this year, mainly due to the peaceful elections which were in contrast to the previous election in 2007 when a disputed outcome led to violence.Technical charts showed the shilling's next resistance level at 84.50 to the dollar and a break below that could see it gain further.In stocks, the main shares index fell 0.9 percent to 4,975.77 points, after an initial jump in prices on the first day of trading after the court upheld Kenyatta's victory."Investors have been tempted to take profits after most stocks broke their four-year high levels," said Ronald Lugalia, an analyst at Afrika Investment Bank, adding the market was "awash with optimism".Barclays Bank and Co-operative Bank led Thursday's decline, with both banks shedding 3.7 percent.

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