Kurwitu closes as NSE’s priciest stock ever at Sh1,500

Shares of sharia compliant investment firm Kurwitu Ventures gained 20 per cent on the first day of trading to hit Sh1,500 per share, becoming the most expensive stock to ever trade on the Nairobi Securities Exchange (NSE).

This made the stake of the top shareholder Abdulrahman Abdillahi, with a 51 per cent holding, increase by Sh13 million to Sh78 million while that of the second largest shareholder Mohamed Hassan rose by Sh7 million to total Sh41 million. Both of the rising millionaires at the stock exchange worked side by side at Dyer and Blair Investment Bank until 2009.

The firm, which aims to attract sophisticated investors who are able to understand its business and carry out due diligence on its projects, listed 102,272 shares yesterday at Sh1,250 which gained to close at Sh1,500. The firm disclosed that the projects it has lined up include one in the energy, mining and agriculture sector.

READ: Sharia investor Kurwitu to list at Sh1,250 a share

“The investors are not investing in the company but the products that we will be bringing to them and if the returns makes sense they will come in,” said Mr Abdillahi, who is also the chief executive of the company. There are no existing sharia-compliant products in the Kenyan capital market hence Kurwitu Ventures would have to create such products.

The company directors and major shareholders Mr Abdillahi and Mr Hassan are hoping to ride on their experiences in corporate financing at the investment bank to grow the firm. They are both chartered financial analysts (CFA). The company is named after the settlement scheme Mr Abdillahi grew up in at Kilifi County while Mr Hassan holds a 27 per cent stake.

Mr Abdillahi disclosed that the company intends to carry out a rights issue in the next six months to raise cash for some of its projects which he declined to name.

Paul Nyaga, deputy chief executive at Dyer and Blair Investment Bank, said the price of the stock was not ambitious given the investors they were targeting and the projects that they aim to bring on board. “It is like corporate finance, you don’t say the project that you have before closure; you say it at the right moment,” said Mr Nyaga.

Kurwitu had disclosed in its listing statement that it intended to reduce the share price through several capital restructuring strategies such as splits, rights and bonus issues.

The company has an asset base of Sh111.8 million which is largely held in land worth Sh102 million. The land, approximately 60 acres, is situated in Lamu. Mr Abdillahi said the company had received a confirmation letter from the registrar of lands indicating the piece was not affected by recent revocations in the Coastal town and the valuation was done by Knight Frank.

In its listing statement Kurwitu indicates that its longest holding period in an investment will be seven years. It will be targeting annual returns of 20 per cent in long-term new investments, 17 per cent for long-term joint ventures and eight to 12 per cent for short-term investments.