NAIROBI: The Kenyan shilling was steady on Friday, while stocks fell for a third straight session, dragged lower by a steep drop in shares of Centum Investment.
On the Nairobi Securities Exchange, the main NSE-20 Share Index lost 32.11 points to close 0.6 percent down at 5,216.96 points.
Centum fell 7.7 percent to close at 60 shillings a share as investors fretted over the suspension of a power plant contract the firm had secured with jointly with others.
The company is part of a consortium that won a government contract to build a 1,000 MW coal fired power plant. Rival bidders challenged the award of the contract in court.
"It could either be that or it could also be profit-taking, because the counter has gone up by more than 130 percent year to date," Agnes Achieng, research analyst at Sterling Investment Bank, said.
In the currency market, commercial banks quoted the shilling at 89.10/20 to the dollar at the 1300 GMT close of trade, barely moved from Thursday's close of 89.15/25.
Demand for dollars by the energy and telecoms sectors to meet their end-month obligations had eased slightly, with the companies reluctant to take long dollar positions on the last day of the week and near the close of the quarter.
The shilling has closed in on 89.50 where the central bank sold dollars to offer support last week. But traders said the central bank was unlikely to step in for now as long as weakness appeared to reflect a need for dollars rather than speculation.
"They probably are not coming in because they figure there is genuine demand for the dollar right now, so if they intervene they will just be depleting their reserves for nothing," said one trader at a commercial bank, who asked not be named when talking about central bank policy.
"From Wednesday next week, if they see that the shilling is still weakening then it will be a sign the speculators have come in and probably that is when they will intervene," he said.
It was not clear if the central bank plans to sell dollars again or what level might trigger action. It has previously said it had the reserves needed to deal with shocks to the economy.
In the debt market, government bonds valued at 543.3 million shillings were traded, compared with 946.08 million shillings a day before.
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