Centum, Longhorn investors book Sh4bn gain on positive reports

Centum and Longhorn shareholders booked Sh4 billion in new wealth last week as the two stocks led the market with gains of 13 per cent apiece on the back of positive corporate announcements.

Centum during the week announced a 25 per cent rise in net profit to Sh9.9 billion for the 12 months ended March 2016, while Longhorn is coming off last month’s successful rights issue that saw it raise Sh533 million.

Centum upped its stake in Longhorn to 60 per cent from 31 per cent through the rights issue, becoming the first firm to gain controlling stake in another Nairobi Securities Exchange-listed firm through a cash call.

Longhorn was trading at Sh5.35 Friday compared to Sh4.70 at the beginning of the week to raise its market value to Sh1.98 billion from Sh1.74 billion, while the parent investment firm closed trading at Sh46.75, from Monday’s Sh41.25, increasing its market capitalisation from Sh27.45 billion to Sh31.1 billion.

“For the first time since 2009, the investment company declared a dividend of Sh1 per share underscoring its sturdy liquidity position. It foresees sustained dividend pay-out in the future,” said Genghis Capital analysts in a market report.

READ: Centum net profit jumps 25pc to Sh10bn

The gains made by Centum last week on the back of the profit and dividend announcement saw it break out of a recent price decline, having shed 6.3 per cent in value over the previous four weeks of trading. Both firms are associated with billionaire Chris Kirubi.

BAT and East Africa Breweries Limited dominated the market turnover during the week on the back of huge foreign-to-foreign investor trades on Thursday.

EABL recorded a turnover of Sh1.57 billion, with BAT posting Sh1.32 billion, to anchor the market which saw its weekly traded value soar to Sh5.82 billion compared to Sh2.03 billion the previous week.

Safaricom also saw heavy trading to record a turnover of Sh1.21 billion, as the stock closed at Sh18.25 a share.