BAT share hits Sh500 ahead of full-year results

British American Tobacco (BAT) has hit a new all-time high of Sh500, driven by investor bets on the stock ahead of its annual results announcement expected next month.

The share is now the most expensive in nominal terms on the Nairobi Securities Exchange (NSE). Barclays Kenya did the first share split in 2006 after hitting the same price, an indication that a similar move could also be on the cards for BAT. The cigarette firm traded a volume of 16,000 shares Thursday.

“BAT touched a new all time high ahead of (financial year 2012) results due in February 2013,” said Standard Investment Bank in an investor note.

Strong foreign investor demand has lifted the stock in recent months. Just over a week ago, the share touched Sh490.

“It is foreign investors who are looking to buy. It (the company) has good fundamentals and when foreigners compare it with other tobacco firms on a global scale, it may seem a bit cheap,” said Kuria Kamau, a research analyst at Kestrel Capital, in an earlier interview.

As a result of the higher price, the cigarette maker’s market capitalisation surged to Sh50 billion Thursday. On Wednesday, the share price stood at Sh493, rising by Sh7 yesterday to hit the new high.

The only other share that comes close to BAT’s price in nominal terms is City Trust whose price averaged Sh400 Thursday.

In the six months to June 2012, the cigarette company net profit increased by 20.6 per cent to Sh1.41 billion and also gave a Sh3.50 per share interim dividend. Its full-year dividend in the previous year was Sh30.50.