Trading activity kicked off the week on a relatively higher note having being helped by foreign investors’ outflows from Safaricom as well as their inflows into Equity bank and East African Breweries Ltd.
The NSE 20 Share index added 15.55 points to close the day at 3223.80 points while the NASI heaved up marginally to settle at 131.58 points. The NSE 25 Share index gained 11.54 points to end the day at 3456.05 points.
Market capitalization slightly changed to KES 1894.664 billion from KES 1893.38 billion earlier whilst equity turnover moved to KES 0.37 billion from KES 0.28 billion before as a result of a 21.37% increase in the number of shares traded from 12.86 million on Friday to 15.61 million today.
Commercial banks will use the Central Bank Rate (CBR) as the base rate to price loans, the sector’s regulator has ruled Tuesday. Central Bank of Kenya (CBK) governor Patrick Njoroge said in a circular to commercial lenders that the CBR was the legitimate base rate as it is anchored in the law.
There has been an ongoing debate as to whether the CBR, now at 10.5 per cent, or the Kenya Banks Reference Rate (KBRR), currently at 8.9 per cent, is the base rate. The CBR gives commercial banks a higher margin than the KBRR.
“The [central] bank shall publish the lowest rate of interest it charges on loans to banks and microfinance banks, and that the rate shall be known as the CBR,” it added while quoting the law that governs its operations.
CURRENCIES:
The Kenyan shilling slightly strengthened against the US dollar on Tuesday due to inflows from exports of horticultural products with ending the day at a mean of KES 101.20, up from an average of KES 101.30 previously.
The local currency gained ground against the Sterling and the Euro as concerns over Brexit still remain. Whilst the mood has been looking considerably more upbeat in recent weeks there is still so much uncertainty over what kind of trade agreement Britain will in fact ultimately have with the EU. This is preventing the pound from continuing its recent rally.