Dividend payout lifts Liberty Holdings share to one-year high

Insurer Liberty Holdings on Monday touched a one-year high after announcing profit increase and a scrip dividend.

Shareholders of the insurer have the option of collecting their Sh1 per share dividend in cash or being issued with bonus shares in an arrangement referred to as scrip dividend.

Liberty Holdings, previously known as CFC Insurance Holdings, traded at an average of Sh17.75 per unit on Monday up from Sh17.45, with 155,600 shares traded.

The company announced a 29 per cent rise in profit last week to Sh1.1 billion, attributed to higher revenue from premiums. The insurer is majority owned by South African Liberty holdings.

In a note to investors after Liberty announced its financial performance, analysts at Genghis Capital said the stock was undervalued and expected the announcement of the dividend to drive its price.

“News of an increase in the dividend is expected to boost the counters’ performance ahead of the announcement of book closure dates,” said Genghis Capital.

Investor appetite for insurance stocks has been growing over the last year following a positive outlook based on increased uptake of insurance uptake in the country.

Safaricom also touched an all-time high of Sh13 in Monday’s trading closing at an average of Sh12.85 per unit. The counter was the largest mover with over 22 million shares traded.

Foreign investors were net sellers of the counter as uncertainty continued on whether the Communications Authority of Kenya was going to enforce a national roaming regulation to allow cross-network sharing of facilities.

Other active counters included Mumias Sugar whose price rose by 1.6 per cent after the sugar miller launched a semen centre to boost dairy farming.

The indicative NSE 20-share index rose marginally by 3.65 points to close at 4909.10 with the total valuation of the market remaining above the Sh2 trillion mark held by Safaricom’s performance.