Kenyan shilling firms, shares extend bear run

By Kevin Mwanza NAIROBI (Reuters) - The Kenyan shilling firmed slightly on Friday as banks cut back dollar positions before the weekend, while a bearish run for shares extended into its fifth straight session. Traders said the market was gearing up for the next central bank policy meeting on September 3. The shilling was posted at 87.45/65 per dollar at the 1300 GMT market close, slightly stronger than Thursday's close of 87.55/75. Duncan Kinuthia, head of trading at Commercial Bank of Africa, said he expected the shilling to trade in the 87.30-87.80 range up to the meeting and hold in the same range if interest rates were kept steady. The central bank kept its key rate at 8.50 percent in July to allow previous cuts to filter through the economy. A Reuters survey of 16 economists taken over the past week forecast rates would stay on hold until at least the end of this year to counter rising inflation and pressure on the shilling. In stocks, the benchmark NSE-20 share index fell 0.2 percent to 4,697.75 points. The index has lost 2.6 percent this week pressured by profit-takers after a recent half-year earnings rally. It is still 14 percent up so far this year. Shares in retailer Uchumi led the losses on Friday, down 4.3 percent to 19.15 shillings each. The company has been a big beneficiary of a growing middle class in the country, like the rest of sub-Saharan Africa. In the secondary bonds market, debt worth 2.2 billion shillings was traded, up from 1.4 billion shillings previously.