Shares at the Nairobi Securities Exchange (NSE) edged higher for the third day on Friday, boosted by a jump in shares of Equity Bank and Safaricom, the bourse’s two most heavily traded companies, while the shilling closed flat against the dollar.

The benchmark NSE-20 share index added 0.4 per cent to finish at 3,961.05 points.

Equity Bank, the country’s biggest bank by customer numbers, rose 2.2 per cent to Sh23.50 per share, cheered by the appointment of a new chief operating officer and a group finance director on Thursday.

“The market was positive on the appointments because it clears a lot of issues on succession plan,” said Johnson Nderi, head of research at Suntra Investment Bank.

Safaricom, the country’s biggest mobile phone provider and one of the most capitalised stocks in the bourse, climbed by 1.3 per cent to Sh4.05.

However, analysts said the Government’s introduction of a 10 per cent levy on fees charged on mobile phone-based money transfer services, including Safaricom’s M-Pesa, would hurt the company’s earnings. “Revenues of Safaricom will be hit from two fronts, the new taxes and the Communication Commission of Kenya (CCK) plans to cut mobile termination rates,” said Nderi.

M-Pesa, which contributes about 16 per cent to total revenues of Safaricom, saw its own revenues grow by 43 per cent to Sh16.9 billion in the business year to the end of March.

CCK plans to cut the rate mobile phone operators charge each other for calls made across networks by 35 per cent to Sh1.44 per minute.

In the foreign exchange market, the shilling ended the session at 84.85/85.05 per dollar, barely changed from Wednesday’s close of 84.85/95.

Traders said the shilling would remain rangebound next week, with inflows from tea exports during the country’s weekly auction expected to offset poor demand for the US currency.

“We expect the normal agricultural inflows, which will help support the shilling on any (dollar) demand we see,” said Julius Kiriinya, a trader at African Banking Corporation.      Kenya is the world’s biggest producer of black tea, and the crop is the country’s top foreign exchange earner.

The Central Bank once again mopped up excess liquidity Friday, soaking up Sh2.32 billion from bids worth Sh3.82 billion, which was some way short of Sh7 billion it intended to mop up.

By Beatrice Gachenge, The Standard

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