Kirubi stake soars to Sh6.4 billion as Centum surges


Mr Chris Kirubi. File Photo

Businessman Chris Kirubi has gained Sh1 billion on his investments at Centum Investment over the past month, joining top individual owners of Britam in minting hundreds of millions at the Nairobi bourse since mid-December.

Shares of investment firm Centum rallied to Sh38.50 on Tuesday, representing an 18 per cent gain over the past month and grown two-fold in one year.

This has seen the value of Mr Kirubi’s 24.99 per cent stake in Centum jump to Sh6.4 billion from Sh5.4 billion in the past month.

Top investors in Britam –Mr Dawood Rawat and Peter Munga — have also gained more than Sh1 billion on account of share price rallies.

READ: Munga, Rawat gain Sh1bn each in a month at Britam

The capital gains seen in the stock of Centum and Britam is linked to corporate actions undertaken by the two firms that have been received positively by investors.

Mr Kirubi in September last year announced plans to raise his stake in Centum from 24.99 per cent to 29.9 per cent by buying an additional 32.65 million shares at the Nairobi bourse.

READ: Kirubi builds Sh1bn war chest for Centum shares

This has created more demand for Centum’s shares in what stock brokers attribute to investors reading better prospects in the investment firm from Mr Kirubi’s action.

It is also believed that the businessman’s share purchases have also drawn speculators seeking to gain from a short-term rally in Centum’s stock.

Capital gains

Mr Kirubi Tuesday promised to provide a clear picture of his current holding in Centum when reached on phone but failed to do so by the time of going to press.

The additional 32.65 million shares he is eyeing represent a five per cent stake in Centum that does not pay dividends, betting on capital gains to reward shareholders. The additional stake is worth Sh1.2 billion.

The Capital Markets Authority granted the billionaire an exemption from having to make a take-over offer for the company despite his intention to raise his shareholding above 25 per cent of the firm’s 665.4 million issued shares.

Mr Rawat and Mr Munga have in the past month seen their investments in Britam grow by Sh1.3 billion and Sh1.1 billion respectively.

Britam’s share Tuesday hit a high of Sh18.65, more than doubling its initial public offer (IPO) price of Sh9 in July 2011 and represents a 23 per cent gain in the past month.

The holding of investment banker Jimnah Mbaru rose by Sh767 million to Sh4 billion, Britam’s CEO Benson Wairegi (Sh351 million) while Equity Bank CEO James Mwangi has gained Sh262.5 million.

Britam has been on acquisition spree, buying 25 per cent of Acorn Group, a real-estate developer and 99 per cent Real Insurance.

Bloomberg News quoted an unnamed source that said the firm is in talks to buy an asset management firm.

Centum posted a 10.6 per cent growth in net profit to Sh892 million in the half-year ended September, with the investment firm set to review its zero-dividend policy.

Dividend freeze

This is the last financial year in which Centum will not be declaring a dividend as its cash retention strategy that started in 2009 ends.

Centum said its board will decide on whether or not to lift the dividend freeze from the next financial year or continue with the profit-retention strategy to fund its growth.

Investors in the firm have since 2009 relied on capital gains from share price appreciation at the Nairobi bourse.