Legislators Dismiss Move by Banks to Offer KES 30Bn to SMEs

A section of legislators have dismissed the move by banks to offer KES 30 billion to Small and Medium Enterprises (SMEs) on friendly terms as a public relations gimmick meant to hoodwink Kenyans. The MPs, three of them from The National Alliance (TNA), said the bankers’ move is also meant to dissuade President Uhuru Kenyatta from assenting to the Bill to cap interest rates.

“We are wondering whether this is a genuine change of heart or a knee-jerk reaction to persuade the President not to assent to the Banking (Amendment) Bill,” said Kiambu Town MP Jude Njomo.

Mr Njomo is the sponsor of the Bill passed by the National Assembly two weeks ago and now awaiting the President’s signature or return to Parliament for possible preferred amendments.

Equities

Trading activity on Thursday improved albeit slightly despite all the indices closing in the red. The benchmark NSE 20 Share index dropped 13.12 points to settle at 3450.10 while the NASI fell by 0.30 points to end at 143.63 points. The NSE 25 Share index shed 8.16 points to finish at 3921.41 points. Shareholders wealth declined marginally from KES 2072.995 billion yesterday to KES 2068.708 today, whereas equity turnover increased to KES 0.27 billion from KES 0.23 billion previously owing to a 9.99% rise in the volume of shares changing hands.

Currencies

The Kenya shilling traded steadily against the US dollar as it closed the day at a mean of KES 101.49 compared to an average of Kes 101.47 yesterday as demand for the greenback from the energy sector was reinforced by inflows from tea exports. The Sterling and the Euro rebounded today after the recent shilling’s strengthening against the two major peers following the Bank of England’s (BoE) decision to cut interest rates last week to a record low of 0.25%. They also raised the UK’s monetary policy programme (QE) by 60 billion Sterling pounds, which on top of the rate cut has sapped all market confidence and the Sterling’s current weakening as a result.