Speculators drive up KQ share to 14-month high

Speculators looking to cash in on the troubled Kenya Airways’ recent stock resurgence have driven its price to a 14-month high of Sh6.10.

Stockbrokers said the demand on the stock is being driven by corporate announcements in the past week-and-a-half, during which the airline avoided a potentially costly pilots’ strike while announcing it expects to cut its half-year losses by 58 per cent to Sh5 billion.

There is also mounting expectation that former Safaricom chief executive Michael Joseph, now a KQ board member, is to take over as chairman. Mr Joseph is credited with creating the Safaricom ‘money machine’.

KQ gained 7.9 per cent in Monday’s trading — having opened the day at Sh5.65 — adding on to the gain of 25.6 per cent it registered last week.

These gains have taken KQ’s year-to-date share price gain to 15 per cent, having been in the red at -10 per cent just over a week ago.

“Driven by local retail investor demand, the airline is now among the best performers year-to-date ahead of first half 2016/17 results which are expected to show an improvement in operating performance,” said Standard Investment Bank in a note to clients.

READ: KQ chairman Mwaniki set to retire after 10-year term

The stock had a turnover of Sh12.3 million Monday after moving 2.02 million shares.

Analysts at Genghis Capital told the firm’s clients in a brief Monday that some of the investors who came in when the share was trading at lows of about Sh3.40 were keen to take some profit, and were looking to sell at up to Sh6.20 a share.

In the other trades done Monday at the bourse Safaricom and Equity Holdings were the only big cap counters to register movement in share price, closing at Sh20 and Sh30.75 respectively after gaining 30 cents and 25 cents.

EABL, KCB, Cooperative Bank and BAT all closed at unchanged prices of Sh272, Sh27.25, Sh12.45 and Sh855 respectively.