Kenya’s main share index fell for a second straight session on Monday, dragged down by a further slide in power distributor Kenya Power’s shares, while the shilling weakened slightly.
Reuters reports that shares in electricity distributor Kenya Power fell sharply for a second day after the government’s rejection of the company’s proposed tariff increase.
Kenya Power’s shares fell by 4.2 percent to close at 17.20 shillings after earlier reaching an intra-day low of 17.00 shillings. The stock fell by 4.3 per cent on Friday.
“For Kenya Power, I think news of the tariff increase is still filtering into the price,” said Kuria Kamau, an analyst at Kestrel Capital.
Nairobi Securities Exchange’s NSE-20 Share Index index closed 0.5 per cent or 22.91 points lower at 4,866.05 points on Monday.
Kenya Commercial Bank, east Africa’s biggest bank by assets, fell 0.6 per cent to close at 42.75 shillings. The bank last week reported first-quarter pretax profit up by 26 per cent to 4.3 billion shillings $51m.
“The results were impressive, prices have rallied significantly since the start of the year. So I guess investors were taking profit on KCB,” Kamau said.
Nairobi’s benchmark NSE-20 share index has gained 18.3 per cent so far this year after investor confidence was buoyed by a peaceful presidential election in early March, a stable currency, reduction in the central bank’s key lending rate and a relatively low inflation rate.
On the foreign exchange market, the Kenyan shilling weakened slightly, although traders said they expected renewed support on the back of dollar inflows from the tea sector and strong foreign demand for local equities.
The shilling closed at 83.75/85 to the dollar compared with Friday’s close of 83.70/90.
Traders forecast the shilling would move within a range of 83.70-84.20 to the dollar in coming days and said technical analysis showed shilling support at 84.05.
