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The Kenyan shilling
weakened marginally against the dollar on Monday as the greenback held
its ground against major international currencies, while a sell-off by
investors sent stocks lower.

The shilling closed
trade at 1300 GMT at 81.20/30 per dollar, a tad weaker than Friday’s
close of 81.10/20. “It’s an overflow from last week’s demand from power
and oil sector. Once this demand fizzles out, we could see a correction
when (dollar sellers from) tea and horticulture return,” said Kennedy
Butiko, the Deputy Head of treasury at Bank of Africa.

Several traders
expected the shilling to weaken further when substantial market players
returned to trade. A 81.00/81.75 range was likely this week as
corporate demand for dollars picked up, they said. “I expect the
shilling to remain bearish on two accounts: a globally strong dollar
and increased corporate (dollar) demand,” said Peter Njuguna, the Head
of Trading at Commercial Bank of Africa.

At the Nairobi
bourse, the benchmark NSE-20 share index was down 10.74 points to close
at 4,610.92 points, but turnover plummeted 44 percent to 603.5 million
shillings. Andrew Thinguri, investment analyst at Faida Investment
Bank, said the decline in shares resulted from profit-taking by
investors, but that other investors were positioning themselves to buy
shares at this time of the year. Thinguri said the market would pick up
again this week.

The Kenyan stock market has enjoyed a buoyant start to the year with
the benchmark index already up over 4.0 percent on a rosy outlook for
east Africa’s largest economy. Safaricom was the most active stock on
Monday, rising 1.0 percent to 4.75 shillings a share. Equity Bank’s
price ticked up 0.85 percent to 29.75 shillings after it hit an
intra-day high of 30 shillings. A total 1.75 billion shillings worth of
bonds were traded on Monday, from 1.18 billion at the previous session.
A five-year bond issued in November traded at a yield of 6.85 percent
compared with a coupon rate of 6.671 percent.