The National Social Security Fund (NSSF) made a rare sale of Sh837.2 million worth of shares in listed tier-one lender KCB Group in the fourth quarter of last year, reversing some of the recent accumulation of the stock.
Disclosures by KCB show that the State-owned pension fund disposed of 21.63 million shares in the three-month period, cutting its ownership of the lender to 8.39 percent in December from 9.07 percent at the end of September.
The fund’s holding of KCB shares fell to 269.7 million units worth Sh10.44 billion by Tuesday’s closing price.
The quarter four sale came after a period of incremental purchases that raised the NSSF’s stake to the nine percent level from 6.12 percent in March 2019.
Besides the share purchases at the market, the holding in KCB has also been boosted by the transfer of the NSSF’s previous stake in the National Bank of Kenya (NBK) into shares of the country’s second-largest lender after KCB’s recent takeover of the smaller bank.
The filings show that the main takers of the shares sold by NSSF were local, institutional and individual investors.
The volume of KCB shares in the hands of local institutional investors rose by 5.35 million in the period to 1.446 billion, equivalent to a stake of 45.01 percent.
Local retail investors now hold 847.4 million shares or 26.37 percent of the lender after buying up an additional 4.82 million units.
The National Treasury remains the single-biggest shareholder in the bank with a 19.76 percent stake, equivalent to 635 million shares.
Aside from the rare KCB sale, the NSSF has been steadily increasing its exposure in large blue chips at the Nairobi Securities Exchange (NSE), eyeing their stable fundamentals and regular dividend payments that complement investment income from government securities.
The pension fund is the biggest local institutional investor in the stock market, holding significant stakes in multiple firms directly and through its appointed fund managers.
KCB, alongside Safaricom, provides the pension fund with its biggest source of dividend income, owing to the large volume of shares held in the two companies.
The fund’s latest audited financials covering the year to June 2021 show that KCB and Safaricom earned it dividends of Sh265.7 million and Sh337.7 million in the period respectively.
A year earlier, NSSF had earned Sh773.6 million in KCB dividends, and Sh962 million from Safaricom, with the dip in 2021 caused by many firms opting to reduce or avoid dividend payouts to conserve capital during the Covid-19 pandemic.
The NSSF has already booked a Sh1 per share interim dividend —totalling Sh267.9 million— that KCB paid its shareholders for the nine months to September 2022 after announcing a 21 percent jump in net earnings to Sh30.4 billion in the period.