Kenyan stocks climb on foreign demand

By George Obulutsa NAIROBI (Reuters) - Kenyan shares rose for a second session on Wednesday, helped by sustained foreign investor appetite for blue-chip companies, while the shilling held steady. The Nairobi Securities Exchange's main NSE-20 index inched up 0.3 percent higher to 4,728.03 points. Stocks traders say the equity market is increasingly attractive to investors as yields on the debt market fall and against the backdrop of a robust economic outlook. Barclays and Co-operative Bank both closed up 0.6 percent at 17.10 and 16.10 shillings per share respectively. Safaricom, east Africa's leading telecoms provider, ended trading up 0.6 percent up at 8.20 shillings. "Foreigners are active," Francis Mwangi, an analyst at Standard Investment Bank, said. Debt yields continued to fall on Wednesday. The weighted average yield on both the Kenyan 182- and 364-day Treasury bill fell in over-subscribed auctions on Wednesday, the central bank said. On the foreign exchange market, the shilling remained steady as investors awaited the outcome of a U.S. Federal Reserve meeting which is set to scale back a stimulus has pumped money into riskier assets. Market players said expectations were that the Fed will launch only a modest scaling back of its $85 billion monthly asset buying programme and that such a move was largely priced in. A more drastic reduction could, though, be painful for frontier currencies like the Kenya shilling. "An aggressive tapering would ... pressure the shilling," one trader in the Kenyan market said. At 1300 GMT, commercial banks quoted the shilling at 87.50/60 to the dollar, matching Tuesday's close. The shilling is 1.5 percent weaker than the dollar in the year to date, and has generally held between 87.30 and 87.70 since mid-July.