Jimnah Mbaru cuts Uchumi stake as local ownership drops
Investment banker Jimnah Mbaru has cut his shareholding in Uchumi Supermarkets, leading an exit of local retail investors from the company. FILE
What you need to know:
Mr Mbaru reduced his holdings of Uchumi shares from 756,989 in March to 256,900 in July.
Local individual shareholders have reduced their combined ownership in Uchumi to 36.4 per cent from 41.6 per cent in the same period Mr Mbaru traded his shares.
Investment banker Jimnah Mbaru has cut his shareholding in Uchumi Supermarkets, leading an exit of local retail investors from the company.
Regulatory filings show that Mr Mbaru, who owns Dyer & Blair Investment Bank, reduced his holdings of Uchumi shares from 756,989 in March to 256,900 in July.
Though Mr Mbaru’s share dealings are small in value, it is viewed as symbolic given market insights available to him from his ownership of Kenya’s top stock brokerage firm.
Local individual shareholders have reduced their combined ownership in Uchumi to 36.4 per cent from 41.6 per cent in the same period Mr Mbaru traded his shares.
“It’s most likely a case of profit-taking by retail investors. The share price does not appear ready to break beyond the Sh20 mark,” said Brenda Githinji, an analyst at Standard Investment Bank.
Uchumi’s share price has shed 9.55 per cent over the past six months to Sh19.85, but was the top performer at the Nairobi Securities Exchange in the 12 months to March when it attracted local investors, including Mr Mbaru.
He holds shares worth billions of shillings in a number of NSE-listed firm including Britam where his 219.3 million shares are now worth Sh1.7 billion.
Uchumi’s profit grew 20.4 per cent to Sh485.9 million in the year to June on rising sales, which stood at Sh14.2 billion up from Sh13 billion a year earlier.
Ms Githinji reckons that foreign investors see Uchumi generating higher returns like retail chains in emerging markets. African retail has attracted interest in recent years from investors keen to take advantage of the continent’s economic growth, which is creating a growing middle class and a whole new breed of consumers.
This is what is attracting foreign investors to Uchumi while its rival Nakumatt plans to invite a strategic investor from outside Kenya. South Africa’s retail giants Massmart, Edgars and Foschini have committed to open outlets in Kenya next year.
Massmart, which is a unit of Wal-Mart, is expected to take a stake of 50 per cent plus one share in Naivas that would give the world’s largest retailer a foothold in Kenya. But some local individuals are holding to the retail chain’s stocks, also taking a long-term view of its performance.
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