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Exchange rates

Previous week rates: 13/05/2016                                              Current week rates: 20/05/2016

Country Currency Buying Selling Country Currency Buying Selling
 US USD 100.50 100.70 US USD 100.59 100.78
 UK GBP 145.15 145.48  UK GBP 146.77 147.10
 EUROPE EUR 114.33 114.58  EUROPE EUR 112.69 112.93
 S.AFRICA ZAR 6.67 6.68  S.AFRICA ZAR 6.32 6.33
 JAPAN JPY 0.9232 .9253  JAPAN JPY 0.9155 .9175
 AUSTRALIA AUD 73.41 73.57  AUSTRALIA AUD 72.45 72.62
 CANADA CAD 78.23 78.41  CANADA CAD 76.55 76.73
INDIA INR 1.5061 1.5093 INDIA INR 1.4894 1.4926

Source: Central Bank of Kenya (CBK)

Kenya shilling declined against US dollar amid increased demand for the foreign currency from energy sectors. The shilling decline was capped at 101.00 levels against US dollar. Liquidity inflow from foreigners looking to tap into the nine year infrastructure bond slightly supported the local unit. The shilling may hold its current levels or slightly strengthen as liquidity remains sufficient in the local market.

Key benchmark interest rates

Interest rate Current Previous Change Direction
Central Bank Rate 11.5 11.5 0.000%
Interbank lending rate 5.4431 3.2648 -0.646%
Month on month inflation rate 5.27 5.27 0.000%
91 Days Treasury Bill 7.998 8.189 -0.191%
182 Days Treasury Bill 10.137 10.273 -0.136%
364 Days Treasury Bill 11.570 11.689 -0.119%

Source: Central Bank of Kenya (CBK)

Interbank lending rate rose from 3.2648% to 5.4431%. Volume traded decreased from 12.35 billion to 1.45 billion. The decline in volume and increase in the interbank rate can be attributed to the demand shift caused by the nine year bond. Banks failed to actively participate in the interbank market as they waited to pay for the bond this week.

91 day T-bill eased by 0.191% from 8.189% previous week rate to 7.998%. CBK offered a total of Kshs 4 billion. Bids amounted to Kshs 7.287 billion of which 4.798 billion was accepted. Volume on bids received declined week on week basis. The rate may revert upwards as 7.988% is a one year low level.

182 day T-bill declined by 0.136% from 10.273% previous week rate to 10.137%. CBK offered a total of Kshs 6 billion. Bids amounted to Kshs 8.473 billion of which 6.096 billion was accepted. 182 day t-bill rate may hold steady or revert upwards at this levels.

364 day T-bill eased by 0.119% from 11.689% previous week rate to 11.570%. CBK offered a total of Kshs 6 billion. Bids amounted to Kshs 7.462 billion of which 5.999 billion was accepted. 364 day t-bill may hold steady at this levels.

CBK offered 10 billion shillings in the Reverse repo market while it mopped up 8 billion shillings in the Repo market. This means that CBK maintained interbank liquidity at the same levels for the week. We expect minimal activity by the Central Bank this week.

Bond oversubscription amounting to 50.939 billion may be the only impediment to prospects of higher T-bill rates during this week auction.

Capital Markets

Equities

Top Gainers Losers
Company Price % Change Company Price % Change
UCHM 3.75 8.70 BERG 54.00 6.90
ADSS 1.40 7.69 PORT 36.00 5.26
EGAD 24.00 4.35 EVRD 2.40 4.00
ICDC 42.25 4.32 OCH 3.85 3.75
TOTL 18.00 3.15 WTK 190.00 3.55

Source: Nairobi Securities Exchange (NSE)

Bonds

CBK offered 2 and 9 year treasury bonds for a total of Kshs 30 billion. Total number of bids received was 713 amounting to Kshs 41.51 billion and 922 amounting to Kshs 39.43 billion of the 2 and 9 year bond respectively. The weighted average rate for the successful bids was 12.02% for the 2 year bond and 13.339% for the 9 year bond. Total oversubscription for the bonds was 50.939 billion. This amount may be invested in the T-bill auction this week.

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Posted by Timothy II Aperit

True believer in numbers. Statistics never lie. Bsc Financial Engineering MBA Finance ACCA