NAIROBI (Reuters) - Kenyan shares fell for the fourth straight session on Tuesday, as local investors persisted in selling off East African Breweries after posting lower-than-expected profits, while the shilling ended flat against the dollar.
The benchmark NSE 20-Share index fell half a percentage point to 4,551.06 points, hovering at a two-weeks low.
Shares in EABL, the biggest stock on the bourse by market capitalisation, extended their losses on weak results to a six-week low, shedding 3.5 percent to close at 277 shillings, after hitting an intra-day low of 271 shillings.
On Friday the brewer announced a 221 percent leap in financing costs on a loan from its parent, Britain's Diageo Plc, used to buy 20 percent of its subsidiary Kenya Breweries which was owned by SABMiller's Tanzania Breweries.
"The decline in first half profits attributed to the financing costs have had a negative effect on the share price," Virginia Wairimu, an analyst at Suntra Investment Bank said.
Kenya Power, the country's sole power distributor, ended 3.6 percent lower at 18 shillings, eroding a steady rise in the bourse, Wairimu said.
On the foreign exchange market, commercial banks posted the shilling at 87.65/75 per dollar at market close at 1300 GMT, unchanged from the previous day, after the central bank stepped in to tighten liquidity.
During the session, the bank received bids worth 5.95 billion shillings for the 10 billion it wanted to absorb via a repurchase agreement.
It accepted all bids. On Monday, central bank drained 13 billion shillings,
"It (the shilling) is still under pressure from importers," Julius Kiriinya, a trader at African Banking Corporation said.
The Central Bank has persistently come into the markets to support the local currency in the run-up to general elections next month, draining liquidity from the money market and occasionally, selling dollars.
The presidential and parliamentary elections are the first since President Mwai Kibaki won a second term in late 2007.
His disputed win plunged east Africa's biggest economy into weeks of violence and political turmoil, sending the economy and the shilling into a tailspin.
There are fears of renewed unrest this time around.
"There is a bit of jitteriness surrounding the elections ... At 88 or above 88, we might see the central bank intervene by selling dollars," Kiriinya said.
The shilling has lost 1.7 percent against to the dollar so far this year as importers hoard the U.S. currency.
On the debt market, bonds worth 419.3 million shillings were traded, a third of Monday's 1.15 billion shillings.