Foreign investor demand lifts BAT share to 12-month high
Posted Wednesday, December 19 2012 at 19:52
Strong foreign investor demand has lifted the British American Tobacco (BAT) stock to a 12-month high, making it the most expensive share at the Nairobi bourse in nominal terms.
The share touched a high of Sh490 in Wednesday’s trading at the Nairobi Securities Exchange (NSE), during which 55,900 shares changed hands, closing at an average price of Sh489.
“It is foreign investors who are looking to buy. It (the company) has good fundamentals and when foreigners compare it with other tobacco firms on a global scale, it may seem a bit cheap,” said Kuria Kamau, a research analyst at Kestrel Capital.
The cigarette maker’s market capitalisation has surged to Sh49 billion boosted by the share price increase.
On Tuesday, the BAT shares had touched a new high of Sh480 and closing at an average price of Sh474 in a session which 89,400 shares changed hands.
On Monday, the share closed at an average price of Sh470.
Analysts from Standard Investment Bank and Kestrel Capital attributed the share price increases to high demand from foreign buyers.
The only other shares that come close to BAT’s price in nominal terms are those of East African Breweries, which closed at an average price of Sh259 yesterday followed by Standard Chartered Bank at Sh239.
In July, the cigarette company said that its net profit increased by 20.6 per cent to Sh1.41 billion in the six months to June and also announced a Sh3.50 per share interim dividend.
The company, which gave a full-year dividend of Sh30.50 last year, saw its revenues drop marginally to Sh9.05 billion compared to Sh9.10 billion last year.
Wednesday’s closing price means that the share is now up 98.78 per cent from its closing price of Sh246 as the end of trading last year, making it the third best performer in terms of capital gains.
As of the close of trading yesterday, Uchumi which closed at Sh19.30 was up 150.65 per cent giving it the first position while Crown Paints, which closed at Sh41 had doubled.
Pan Africa Insurance closed at Sh40 (up 92.77 per cent), KCB at Sh29.25 (up 73.59 per cent) and Safaricom closed at Sh5.05 (up 71.19 per cent).
BAT’s share price increase has also affected the performance of the NSE 20 Share Index which has also been on an upward trend this week.
The NSE 20 Share Index yesterday went up 38.36 points to close at 4,124.06 points.