Equity Bank stock firm as trader sells 10 million shares

Equity Bank’s share traded at a flat price of Sh15.90 on Friday as a trader moved more than 10 million units in a block trade valued at Sh162 million.

The banking stock had a total of 12.7 million shares worth Sh201.9 million traded, accounting for nearly half of the market turnover. The shares were sold by a local investor and taken up by foreigners, dealers said.

“There was high foreign interest in the stock, a local investor sold shares worth Sh162 million in a block trade,” said Eric Munyoki, a research analyst at Dyer and Blair Investment Bank.

The Business Daily could not, however, establish the identity of the seller.

Top shareholders of the bank have cashed in on their investment in recent years following expiry of a Capital Markets Authority lock-in period imposed at the time of listing five years ago.

Last year, Equity CEO James Mwangi (pictured above), reduced his stake by five million shares. Others who reduced their interest at the bank include the chairman, Peter Munga, the late Nelson Muguku, and John Kagema.

The Equity share attracts close foreign investor interest due to its high liquidity and the consistent growth in earnings, which have increased by double digits since its listing.

The bank reported a 41 per cent growth in net profit to Sh7.2 billion in the nine months to September last year — earning the slot of Kenya’s most profitable lender ahead of Barclays Bank and KCB Group. Equity is second largest bank by assets behind KCB.

It’s broadening product range includes home loans and corporate banking plus a re-entry into investment banking this March.

The banking sector also saw National Bank shed 5.7 per cent on a day when it advertised the position of its managing director.

The current managing director, Reuben Marambii, has been at the helm since 1998 having joined from Central Bank to salvage the parastatal that was hurting under the massive weight of non-performing loans arising from borrowing by then politically influential figures.

Mr Marambii, whose retirement has been postponed before, is set to retire at the end of year and will boost of turning around the company and seeing its shareholders rewarded with dividends for the first time in 12 years in 2011.

The agricultural segment was also active with analyst attributing it to recent result announcement by Rea Vipingo which showed a nearly seven-fold growth in profits.

“Agriculturals, Kakuzi and Williamson Tea were unusually active, possibly a signal that investors were starting to look at the sector positively after a six fold increase in net profits by sisal grower Rea Vipingo posted earlier in the week” said Standard Investment Bank in its market report.

Despite the high turnover, which included trading of 27 million Safaricom shares, the NSE-20 share index lost 19.62 points to close at 3,185.14 points.