Last week, the Kenyan Shilling stabilized against the US Dollar, closing the week at KShs. 129.19.

• The Shilling’s 0.01 percent uptick lifted the year-to-date performance to 17.4 percent.
• The marginal strengthening was partly attributed to the high foreign currency inflows from agriculture and tourism. 
• The equities market closed the week on a bullish note, signaled by the NSE All Share Index (NASI), which was up marginally week on week by 1.8 percent to close at 105.9.

Similarly, the year-to-date performance rose to 13.1 percent, buoyed by marginal gains from large cap stocks during the week which were however watered down by similar losses from BAT and Co-op Bank.

 Further, foreign investors netted out of the Nairobi Securities Exchange (NSE), recording a net selling position of KSh 292.1 million. Investor wealth increased by KSh 8.1 billion in the same week.

According to data from Morgan Stanley Capital Index (MSCI), NSE posted 3.3 percent returns in the five days of last week. In the international market, yields on Kenya’s Eurobonds increased by an average 6.8 basis points, reflecting deteriorating investor confidence in the East African nation. 

In the secondary market, the value of bonds traded during the week increased by 61 percent to KSh 31.4 billion from KSh 19.5 billion recorded a week prior.

Treasury bills were oversubscribed, recording an increased subscription rate to 162.3 percent from 100.8 percent recorded in the previous week. The 91- day paper remained the most demanded paper with the subscription rate clocking 580.2 percent on account of increased investor demand on short term papers to hedge against duration risk. 

Yields on all the papers extended declines, all falling below the 16.65 mark – pointing to CBK’s recent move to cut the Central Bank Rate to 12.75 percent from 13.0 percent.

Liquidity conditions in the Money Market eased, with the average interbank rate decreasing to 12.6 percent from 13.9 percent  recorded a week prior, partly attributed to tax remittances  outpacing government payments. The interbank rate trailed within the adjusted CBK range, with market operations remaining active. 

Kenya’s usable forex reserves increased by 2.1 percent to US$7,503 million, enough to maintain 3.9 months of import cover from US$7,349 million the previous week. 

The foreign reserves fall below the 4 months statutory requirements and equally lower than the EAC’s convergence requirement of 4.5 months of import cover.