BAT share nears Sh1,000 mark as most expensive stock

BAT Thursday widened the gap as the most expensive stock by closing well above Limuru Tea’s Sh880, leveraged by an undisclosed local investors’ block sales.

The cigarette manufacturer’s stock closed at an all-time high of Sh949, just a shilling shy of its intra-day trading high of Sh950, with some market analysts speculating it could test the Sh1,000 historic mark.

BAT, that previously closed at Sh884, dominated the market moving 560,000 shares worth Sh531.4 million that represented 40 per cent of the total market turnover of Sh1.34 billion.

“The counter saw local investors both selling and buying, with the sellers booking profits as the buyers looked towards the high dividends,” said a trader at an investment bank.

The counter is seen as a safe bet in case of any downturn in the market due to its low liquidity. Its high nominal price means anyone looking to sell would need to find a buyer willing or able to pay a high premium on the stock, thus limiting panic selling.

Most transnational subsidiaries and foreign dominated blue chips have frowned upon the practice of share splits that has seen valuations of some firms shoot up. Some locals have had no qualms about splitting twice by a factor of 10.

BAT’s latest surge saw its market worth cross the Sh90 billion mark for the first time, to stand at Sh95 billion. The counter is currently 58 per cent up year-to-date.

“The cigarette manufacturer is in a secure market position, as its industry has barriers to entry, which we believe attracts investors to the counter,” said Standard Investment Bank in a market note.

The NSE 20 Share Index meanwhile closed 17.89 points lower at 5249.65, while the All Share Index (NASI) shed 0.6 points to stand at 163.63.

Total capitalisation also retreated to Sh2.3 trillion from Sh2.31 trillion, with big counters mainly falling in value except for EABL that gained Sh4 billion in capitalisation to Sh224.6 billion on recording Sh5 gain in share price to close at Sh284.

Safaricom shed 20 cents to close at Sh12.75 a share, meaning the counter saw its capitalisation drop by Sh8 billion to Sh510.8 billion.

Other blue chips shedding value included Standard Chartered Bank, which cut Sh3.4 billion when it closed Sh11 lower at Sh334, and Equity Bank which saw a Sh2.8 billion drop in value after closing lower by 75 cents at Sh49.75.

The day’s top decliners in relative terms were Centum, Eveready and Britam that shed 7.5, 7.1 and five per cent respectively in closing at Sh61.50, Sh4.55 and Sh33.