NAIROBI (Reuters) - The Kenyan stock market broke a two-day run of gains on Wednesday, dragged down by a huge drop in bourse star Uchumi Supermarket after its full-year pretax profit fell by 22 percent.
The benchmark share index fell by half-a-percentage point to 4,014.03 points.
Shares in Uchumi tumbled 8.3 percent to 18.25 shillings as investors punished the stock after the supermarket chain posted an unexpected 22 percent drop in pretax profit to 403 million shillings.
"I did not expect the operating costs to climb that fast despite their expansion. That was surprising," said Brenda Kithinji, an analyst at Standard Investment Bank.
"The sellers were mainly local institutional investors. Of course when the results came in and they were not as strong, (investors) thought it was a good time to take profits."
Investors have been piling up Uchumi shares this year in anticipation of a strong performance and dividend payout, making it the best performer in the Nairobi Securities Exchange, jumping more than 150 percent this year.
However, the supermarket chain offered a dividend of 0.30 shillings per share, the first in over six years, which analysts said would not satisfy investors.
Also on the losing end was Standard Chartered which dropped 1.3 percent to 215 shillings.
In the primary auction, yields on the 182-day Treasury bill rose to 10.484 percent from 10.307 percent previously, in an over-subscribed auction.
In the foreign exchange market the shilling finished at 85.00/10 per dollar, unchanged from Tuesday's close.
"The market has been well-balanced at the moment. We expect the market to be steady for now. The shilling might weaken slightly as we get closer to end-month," Sameer Lagadia, head of trading at Diamond Trust Bank, said.
Lagadia said there was little impact after the central bank mopped up liquidity from the money market. It had sought to mop up 15 billion shillings via repurchase agreements on Wednesday.
It received bids worth 11.36 billion shillings and accepted 10.28 billion shillings at a weighted average rate of 9.939 percent.
The overnight weighted average rate has steadily risen to 9.4 percent on Tuesday, from 9.2 percent previously, and 6.5 percent on September 17, on the back of the central bank's operations.
Lagadia said he expected the shilling to trade in the 84.90-85.20 range in coming days.
Bonds worth 1.60 billion shillings were traded, down from 1.92 billion shillings on Tuesday.
Source: http://news.yahoo.com/uchumi-pushes-kenyan-stocks-down-shilling-stable-vs-144539293--finance.html
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