Kenya Economy on Track for 6pc Growth -Central Bank

Equities

Trading activity at the exchange on Thursday showed mixed signals as the NSE indices were all up while the turnover declined. The NSE 20 Share index closed at 3217.75 points having gained 40.05 points from its previous level while the NASI added 1.19 points to end at 136.01 points. The NSE 25 Share index jumped by 56.41 points to settle at 3591.42 points. Market capitalization advanced marginally by 0.89% to KES 1958.672 billion from KES 1941.479 billion yesterday whilst equity turnover reduced to KES 0.48 billion from KES 0.57 billion before. The number of shares traded increased to 35.17 million from 22.00 million earlier.

Kenya’s economy will hit the government’s growth target of 6 percent this year on the back of private sector performance, the central bank governor said on Wednesday. Patrick Njoroge also told Reuters that a new rule capping commercial lending rates – a move the governor opposed – made setting the benchmark rate more complicated as it was not clear how any rate cut would affect commercial bank lending decisions.

“The economy is doing relatively well,” Patrick Njoroge told Reuters in his office, saying it was on target for the 6 percent expansion forecast by the government. “This is the time for investors to actually place a long term bet on the economy. “But he said the Monetary Policy Committee now faced a tougher job determining how policy, such as last week’s rate cut by 50 basis points, would feed through into the wider economy since the decision to cap commercial lending rates.

Currencies

The Kenyan shilling witnessed a slight drop to a mean of KES 101.31 against the US dollar compared to an average of KES 101.28 yesterday, with the local unit receiving support from dollar inflows from the horticulture sector. The local currency chopped off more points against the Sterling and the Euro keeping the trend that Sterling exchange rates have been range bound as investors try to gauge the impact of the Brexit and balance their holdings of the pound.