Capital Markets

Listed companies net Sh25bn in rights issues as market recovers

Investors at the Nairobi Securities Exchange (NSE) will remember 2012 as the year when listed firms raised a record amount of cash.

The national carrier, Kenya Airways, and four lenders raised a combined Sh25.6 billion through five rights issues which attracted Sh37.6 billion—the highest so far.

The five companies issued a total of 1.3 billion shares through the rights issues, surpassing the number of shares offered through this method in any other year.

The NSE also saw the listing by introduction of Longhorn Publishers, CIC Insurance and Uganda’s power distributor, Umeme.

Umeme, whose primary listing is at the Uganda Securities Exchange, was the first in the region to cross-list its shares at the NSE, breaking the cycle of companies whose primary listing is in Nairobi, but have been cross-listed in other markets.

While listed firms embarked on the capital raising initiatives, share prices were rising.

As at the close of trading on December 24, Uchumi Supermarkets was the best performing stock of the year in terms of capital gains, having closed at Sh19.15 from Sh7.70, a 148.7 per cent increase, as at the close of trading on the last day of 2011.

Crown Paints and British American Tobacco were the second and third best performing stocks having gained 102.44 per cent and 100 per cent to close at Sh41.50 and Sh492. They opened the year at Sh21 and Sh246 respectively.

The NSE 20 Share Index, which closed at 4,109.28 on December 24 having opened at 3,205.02 points, had gained 28.21 per cent while market capitalisation which represents investor wealth had gained by Sh395.39 billion to Sh1.263 trillion.

Investors will remember 2012 as the year when a record amount of cash was raised and when the market recovered from a slump in 2011.