An employee of Athi River Mining company packs cement into bags. The firm’s shares have been on high demand at the Nairobi Securities Exchange. FILE
What you need to know:
The total value of shares traded at the NSE hit Sh2.14 billion as a foreign emerging markets fund and high net worth individuals showed high appetite for ARM and KCB Group shares.
The ARM shares and the Sh576.39 million KCB Group shares accounted for 67.34 per cent of the total value of shares traded on Thursday.
Foreign investors moved Athi River Mining (ARM) shares worth Sh866.83 million on a day that the total value of shares traded at the stock market rose to a four-year high.
The total value of shares traded at the Nairobi Securities Exchange (NSE) hit Sh2.14 billion as a foreign emerging markets fund and high net worth individuals showed high appetite for ARM and KCB Group shares, which were traded in large blocks.
The ARM shares and the Sh576.39 million KCB Group shares accounted for 67.34 per cent of the total value of shares traded on Thursday.
“The equities market was upbeat moving Sh2.14 billion worth of shares, levels last seen in 2008 during the Safaricom IPO,” said the Standard Investment Bank in a note to investors.
During the day’s trading, KCB Group, Standard Chartered Bank and Bamburi Cement hit new all year highs of Sh35.50, Sh273 and Sh217 respectively, with foreign investors dominating the counters.
“Overall market sentiment is bullish supported by positive local and foreign research analyst reports and expectations of strong earnings,” said Fred Mburu, chief executive officer of Apollo Asset Management Company.
Mr Mburu said that investors who were buying now were looking beyond the Elections and at the long-term prospects of making gains on blue chip companies.
He said investors who were expecting share prices to have dipped before the Elections may be re-thinking their strategy as the market has continued on an upward trend.
The NSE 20 Share Index — the benchmark index which tracks the prices of 20 select shares at the Nairobi bourse — closed at 4,561.16 points, having gained 10.36 per cent from 4,133.02 points, its closing at the end of last year.
“The NSE 20 index climbed 0.85 per cent to touch a multi-year high of 4,561.16 points, levels last seen in early 2011,” noted the SIB report.
Eric Musau, a research analyst at Standard Investment Bank (SIB) said the value of shares traded was about four and a half times that which is traded on an average.
“We have only had such turnover during the first weeks of trading after the Safaricom IPO and when we have had transfers of shares which do not count as shares traded,” he said.
SIB in its research report said local investor-trading dominated KCB Group, which is set to announce its full-year earnings for 2012 on February 15.
Mr Musau said investors who are buying into ARM Cement could be counting on additional production capacity that is expected to come online in Tanzania, which is expected to boost the company’s revenues and profits going forward.
ARM Cement, which effected a split of five for each share held on December 28, closed at an average price of Sh60.
The counter has the highest price-to-earnings ratio in the construction and allied sector.
The firm’s share price adjusted from Sh223 on December 27 to Sh44.50 on the day the split was effected, implying a market capitalisation of Sh29.71 billion on Thursday from Sh22.03 billion just before the share split.
ARM shares have had the second best performance since the year began, having appreciated by 34.83 per cent after Kengen shares, which have shot up by 42.61 per cent during the first six weeks of this year.
