Investors Diary

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Wednesday, November 21, 2007

Implications of Strengthening Kenya Shilling

Kenya Shilling
The Kenya Shilling has been on an upward trend in recent past and this is attributed to the entry of foreign investors into the market that has rallied the Kenyan shilling to new highs.

New Highs
Yesterday, the shilling settled at one of its strongest positions to the dollar at a mean rate of Sh65.40, the strongest level since 1999.


The strengthening of the local currency against the US dollar was steered by increased foreign exchange inflows amid subdued demand from:
1.Foreign Investors rallying to invest at the NSE including top Wallstreet operatives.
2. Offer by Helios, an international investor, last week by buying a 24.99 per cent stake in Equity Bank worth over Sh11 billion.
3. This was followed by news that France Telecom would acquire a 51 per cent controlling stake of Telkom Kenya worth Sh26 billion.
4. Increased demand for the shilling from exporters to meet end month demands.
5. Increased tourist reception into the country with projections likely to go higher with the festive season approaching despite the impending electioneering period.
6. Strategic positioning by various players before the anticipated upcoming Safaricom IPO.
7.Other variables

Players in the forex market include:
-Commercial companies
-Central Banks
-Hedge funds
-Retail and forex brokers
-Investment management companies

1. Exporters will face challenges of penetrating foreign markets as exports become expensive
2. There will be a significant reductions in local revenue terms for exporters.
3. Kenya will become expensive to trade with.
4. Net foreign exchange earnings will go down.

1 comment:

NSIS said...

Latest Emerging Details

A Disturbing new story has emerged from the Kibaki's birthplace in Nyeri,Kenya. Its a story never told before about the reason for the death of Kibaki's father. Mzee Karauri,speaking to a news reporter in Nairobi in November said that one day in the 1980's,Kibaki had hatched a plot to kill the then president Daniel Moi. A bomb had been placed in a chartered Kenya Airways plane that was to carry the president to a meeting in Ethiopia. Kibaki was responsible. Moi,who had an airtight intelligence network got hind of this plot. The former president was known to hit back hard when betrayed. He announced at the last minute that Kibaki represent him in Ethiopia. Kibaki was terrified. He badly needed a reason not to travel to Ethiopia,and it better be a good one. At about the same time,his father was ailing at a village in Nyeri. Kibaki is reported to have began a well executed plot that ended up with his father being killed. He then called Moi to inform him of his "loss".

Cosequently, Kibaki escaped by sacrificing his father. The bomb was defused, but from then on, Kibaki knew that he owed Moi his life and that he would do Moi's bidding. That's why Kibaki willingly split Kikuyu votes in 92 at Moi's bidding, this was supposed to be the payback for the attempt on Moi.