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The Kenyan market reacted positively with the shilling strengthening against the dollar while some shares soared a day after the National Assembly passed the two crucial legislations in parliament – the interest rates cap and the Public Finance Management (PFM) Act.

The Finance Bill 2019 was returned to Parliament after President Uhuru refused to sign it without a repeal of the interest cap law.

To revise Kenya’s debt ceiling up to Sh9 trillion from the previous Sh6.5 trillion, Parliament had to amend the PFM Act.

Following the changes, the shilling was quoted at 103.00/20 per dollar, compared with 103.25/45 registered the previous day, while all banks’ shares soared expect CFC Stanbic Holding whose stock shrank by 5.7 per cent while Housing Finance (HF) Group share prices remained unchange.

Share perfomance

At the bourse, KCB Group topped the list with a 5.9 per cent rise, followed by Equity Bank at 5.5 per cent, NCBA (5.2 per cent), Barclays Group (2.3 per cent), Standard Chartered (1.6 per cent), Co-operative Bank (1.6 per cent) and I & M Holdings (1.5 per cent) .

Other counters, which also moved up slightly after the removal of the interest rate cap includ CIC Insurance, Jubilee Insurance, Liberty Kenya Holdings, Sanlam, Kenya Re Corporation, Kenya Airways and East Africa Cables. 

Sterling Capital director John Kirimi said interest rate cap should have been removed the day the government realised that it was not serving its intended purpose.