MARKETS | THE SHILLING
The shilling strengthened and registered substantial gains in what was seen as market correction after overshooting through key support levels due to sentiment related to political uncertainty in the region, stated a report from Alpha Capital Markets.
This was during the week ended November 10, 2017, where trading was also in the range of 3610/3620.
Commercial banks quoted the local unit at 3,632.96/ 3,642.96 on Monday afternoon unchanged from the morning session.
However, this was slightly down from Friday’s close of 3,631.14/3,641.14.
In the money markets, there was a slight drop in both overnight and 1 week funds. Rates were 6% and 9.5% respectively.
In the fixed income space, Treasury bill yields continued on the downward path. 91 days traded at 08.579%, 182 day at 8.777% and 364 at 9.298%. All tenors were oversubscribed.
In the regional markets, the Kenya shilling held firm. Demand remained subdued amid tight liquidity conditions in the money markets.
Whereas the Kenyan shilling was trading at 35.08/35.18 buying and selling respectively, the Tanzanian shilling was trading at 1.62 buying and selling respectively.
Global Market Overview
In the international markets, the greenback dipped and Wall Street followed in a similar trend on expectations of possible delays in the long awaited US tax reforms.
The Euro was trading at 4,236.39/4,248.06 buying and selling respectively.
Alpha Capital Markets boss, Stephen Kaboyo said the markets took a view that delays in implementing corporate tax reforms could change the way the Federal Reserve reads the US economy and it's behaviour with respect to the conduct of monetary policy going forward.
“Outlook indicates that the shilling is expected to strengthen marginally supported by commodity inflows that are expected to restore the balance between supply and market demand. The unit will also gain support on account of mid-month tax payments that will keep corporate demand at bay,” Kaboyo said.