Market activity surged considerably on Wednesday when compared to its previous performance. The NSE 20 Share index gained 19.81 points to settle at 3462.68 points while the NASI remained unchanged at 146 points.
The NSE 25 Share index dropped 3.00 points to end the day at 3913.93.Market capitalization increased slightly to KES 2109.826 billion from KES 2107.377 yesterday, whilst equity turnover amplified to KES 0.84 billion from KES 0.31 billion before as a result of a significant rise in the volume of shares traded.
The President has signed into law the Banking (Amendment) Bill, 2015 which intends to regulate interest rates that are applicable to banks’ loans and deposits, capping the interest rates that banks can charge on loans and must pay on deposits.
Read: President Assents to Bill Capping Bank Interest Rates
The President mentioned that the new law will be implemented despite the difficulties that it would present, which include credit becoming unavailable to some consumers and the possible emergence of unregulated informal and exploitative lending mechanisms.
The government will closely monitor the difficulties, particularly as they relate to the most vulnerable segments of the population. Whilst doing so, his Government will also accelerate other reform measures necessary to reduce the cost of credit and thereby create the opportunities that will move the economy forward.
Currencies
The Kenya shilling gained against the US dollar on Wednesday as it traded at a mean of KES 101.35 compared to average of KES 101.38 previously but could come under pressure in the short-term from importers’ end of month dollar demands.
The local currency weakened marginally against the Sterling but was almost flat against the Euro as global markets anticipate underwhelming UK growth figures expected to be released this Friday and where, if UK data continues to come in below expectations then further monetary easing will be initiated hence likely to weaken the Sterling more.