Kenyan Shilling Weakens Slightly Against US Dollar

Currencies

The Kenyan shilling weakened slightly on Wednesday as it traded at a mean of 101.26 shillings against the dollar, compared to an average of 101.21 shillings yesterday, owing to rising demand for the dollar from oil importers.

The local currency gained further against the Sterling following continued pressure on the Pound with the catalyst for the Sterling fall been UK Prime Minister, Theresa May’s comments over the weekend at the Conservative Party Conference. She outlined the end of March next year as the date that the invocation of Article 50 will take place, meaning the UK will then have 2 years to remove itself from the EU.

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Kenya’s private sector activity rose in September on the back of a recovery in tourism and a rise in orders from new export markets, a survey showed on Wednesday. The Markit CFC Stanbic Kenya Purchasing Managers’ Index (PMI) stood at 53.5, unchanged from August, but still well above the 50.0 mark that denotes growth.

Jibran Qureishi, regional economist for East Africa at CFC Stanbic Bank, said tourism, a top foreign exchange earner, had improved after the government boosted security following a spate of militant attacks that scared off holidaymakers. He said respondents to the survey had also reported higher export orders from countries like Namibia, Sudan and Ethiopia.

“This diversification of export markets will only serve to underpin the Kenyan private sector’s resilience,” Qureishi said. Kenya’s economy expanded by 6.2 percent in the second quarter of this year, up from 5.9 percent in the year ago period, mainly due to a rebound in tourism.

Equities

Market activity slowed down on Wednesday as turnover dropped by 62 percent owing to a 71.69 percent decline in the number of shares traded. The NSE 20 Share index was slightly up by 2.20 points to close the day at 3284.84 points while the NASI edged up marginally by 0.03 points to end the day at 137.74 points. The NSE 25 Share index lost 1.66 points to settle at 3658.90 points. Market capitalization remained flat at KES 1983 billion whilst equity turnover decreased to 0.21 billion shillings from 0.56 billion shillings previously due to a reduction in the volume of shares traded.