Previous week rates: 10/06/2016 Current week rates: 17/06/2016
Source: Central Bank of Kenya (CBK)
The local unit declined against US dollar as dollar demand from telecommunication and energy sectors outweighed inflows from horticulture sector and Diaspora remittances. The shilling has been under pressure in recent weeks as political temperatures increase and the regulator continues to pump liquidity into the local market.
Bank of England (BOE) left its benchmark interest rate unchanged at 0.5%. The interest rate decision was a non event as the 23rd June BREXIT referendum vote weighed on the pound. The pound declined against most of its major peers especially US dollar amid fears of BREXIT. The pound is expected to be extremely volatile next week as markets factor in the BREXIT uncertainty.
The Federal Reserve (FED) followed suit and left interest rates unchanged at 0.5%. The FED chair Janet Yellen left doors open for a July rate hike if economic data releases from US support such a move. The dollar slightly declined after the interest rate release but recovered most of the losses as the markets expect the US economy to continue its robust growth. The FED may be hand twisted to raise rates to keep inflation rates in check at 2.00% if the US economy continues to grow.
British exit from European Union (BREXIT) referendum would outshine all other economic releases next week. High volatility would be experienced in the global markets as investors restructure their portfolios in anticipation of the vote outcome. There will be opportunities to make loads of money but the downside risk of wiping out your capital would also be expected.
Key benchmark interest rates
|Central Bank Rate||10.5||10.5||0.000%||−|
|Interbank lending rate||3.0679||2.7507||0.317%||↑|
|Month on month inflation rate||5.00||5.00||0.000%||−|
|91 Days Treasury Bill||7.161||7.303||-0.142%||↓|
|182 Days Treasury Bill||9.545||9.648||-0.103%||↓|
|364 Days Treasury Bill||10.734||10.844||-0.110%||↓|
Source: Central Bank of Kenya (CBK)
Inter bank lending rate rose from 2.7507% to 3.0679%. Volume traded increased from 5.605 billion to 7.800 billion. There was minimal activity in the inter bank market and inter bank rates remained subdued.
91 day T-bill eased by 0.142% from 7.303% previous week rate to 7.161%. CBK offered a total of Kshs 4 billion. Bids amounted to Kshs 7.636 billion of which 4.606 billion was accepted. Volume on bids received increased week on week basis.
182 day T-bill declined by 0.103% from 9.648% previous week rate to 9.545%. CBK offered a total of Kshs 6 billion. Bids amounted to Kshs 8.635 billion of which 5.420 billion was accepted. Volume on bids received decreased week on week basis.
364 day T-bill eased by 0.110% from 10.844% previous week rate to 10.734%. CBK offered a total of Kshs 6 billion. Bids amounted to Kshs 5.518 billion of which 5.516 billion was accepted. Volume on bids received decreased week on week basis.
CBK offered to inject a total of 16 billion shillings in the local market this week via reverse repos. Treasury bill rates may remain on the downtrend as the regulator continues to pump liquidity into the local market.
The graphs below depict visual movement of the inter bank and T-bill rates.
|Company||Price||% Change||Company||Price||% Change|
Source: Nairobi Securities Exchange (NSE)
Standard Group Ltd (SGL) moved from the top most loser last week to the top gainer this week. The share price rose from 26.50 to 29.25 though this price is lower than 31.25 where it was trading two weeks ago.
Longhorn Kenya (LKL) continued to perform well as it remained among the best performers of the week. Stock price increased from 5.35 to 5.50 week on week basis.
Banking industry stocks featured in this week’s top gainers and losers. Diamond Trust Bank (DTK) was among the top performers while National bank of Kenya (NBK) and Kenya Commercial Bank (KCB) were among the top losers.
Home Afrika (HAFR) moved from the second worst performing stock last week to the second best performing stock this week. The stock price rose from 1.35 to 1.45.