Kenyan Stocks Rise Most in 3 Weeks as T-Bill Rates Drop to Near 4-Year Low

Kenya’s stock index rose the most in more than three weeks on speculation investors moved into equities to seek higher yields as rates at this week’s Treasury- bill sale fell to near the lowest in at least four years.

The 55-member Nairobi Stock Exchange All Share index gained for a third day, rising 0.8 percent to close at 78.84 by 3 p.m. in the city. Gains were led by Diageo Plc’s Kenyan unit, East African Breweries Ltd., which rose the most since May to 180 shillings. Barclays Bank of Kenya Ltd. advanced for the first day in four and Kenya Power & Lighting Co., the nation’s monopoly power distributor, rallied 4.2 percent to the highest since June 2008.

The so-called cut-off rate on 91-day T-bills declined to 2.1 percent at an auction this week from 2.020 percent at the previous sale, the central bank said yesterday. That’s near the lowest since Bloomberg began regular records in March 2006. Rates have declined as the central bank has reduced its lending measure six times since 2009 to help spur economic growth and boost the expansion of credit to businesses and households. The benchmark interest rate of 6 percent is now at its lowest since it was introduced in June 2006.

“The real juice is not in the bond market anymore,” Aly- Khan Satchu, an independent analyst, said by phone from Nairobi today. “You are now seeing some domestic moves out of the bond market into the equity market.” Banks can’t invest in each other and are buying industrial stocks including East African Breweries, he said.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net.

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email