Shares snap out of losing streak

Kenya’s benchmark index edged higher on Friday, breaking an eight-session losing streak as bank shares rose. The shilling weakened slightly. The benchmark NSE 20 index added 2.77 points or 0.1 per cent to 5,350.30 points, just off its 7-year peak.

“It looks like the profit-taking session has bottomed out,” said Daniel Kuyoh, an analyst at Kingdom Securities. “We expect to see more of these cycles happening in the next three or four weeks as the banks and insurance companies release results,” he said.

The index was helped by Kenya Commercial Bank, whose shares closed at Sh59.50, up from Sh59.00, the highest gainer in the sector. Kuyoh said results from banks and insurance firms suggested profit growth was slowing and even falling in a few cases, which could weigh on the market in the months ahead.

CIC Insurance posted a 17 percent drop in 2014 pretax profit on Friday, pushing its shares down to Sh9.00 from Sh10.30. “With the global economic outlook and the prospect of interest rates going up in the United States, foreign investors could pull back from the Kenyan market,” Kuyoh said.

On the foreign exchange market, the shilling closed at 91.75/85, weaker than Thursday’s close of 91.65/75.
Sheikh Mehran, head of trading at I&M Bank, said energy sector firms had bought dollars, weakening the shilling.

He said the currency would trade between 91.50-91.80 to the dollar next week, finding some support from the government’s sale of a 12-year infrastructure bond on March 25, although he said the impact would be limited.