Kenyan shares fall as foreign investors sell

Selling by foreign investors drove Kenyan shares to two-week lows on Monday as global markets fell. The shilling also weakened.

Mobile operator Safaricom, often the most heavily traded stock and usually popular with foreigners, dropped 4.3 percent to close at 14.35 shillings.

“The ones that took a hit were the ones that were held by foreign investors, such as Safaricom,” said independent trader Aly Khan Satchu. “When your biggest cap stock is down 4.33 percent, there is not much hope for the All-Share index.”

The Nairobi All-Share index closed 2.2 percent lower at 146.40 points and the benchmark NSE 20 index slid 1.5 percent to 4,337.47 points.

On the foreign exchange market, global worries also trumped domestic factors. One trader said increased shilling liquidity had been driving down overnight interbank rates since mid-August, which was adding to pressure on the currency.

By the 1330 GMT close, the shilling was trading at 103.75/85, compared with Friday’s close of 103.20/30.

“This is mainly because of what we are seeing on emerging markets, where capital outflows are hurting local currencies,” said Joshua Anene, a trader at Commercial Bank of Africa. “We are all in the same boat.”

He said extra shilling liquidity had helped drive overnight interbank rates down to about 15 percent, compared with more than 20 percent earlier in August.

On the secondary market, government bonds valued at 580 million shillings ($5.59 million) were traded, compared with 131 million shillings on Friday.