Capital Markets

Billionaire investors grow wealth from poll rebound


From left, Equity Bank's Peter Munga, Scangroup boss Bharat Thakrar and businessman Chris Kirubi. PHOTOS | FILE | NMG

Wealthy stock market investors are reaping the benefits of a strong rebound in equities trading that followed last week’s General Election, adding billions to their net worth.

The Nairobi bourse’s billionaire investors such as Baloobhai Patel, Equity Bank’s #ticker:EQTY chief executive officer, James Mwangi, Equity founder Peter Munga, Co-operative Bank #ticker:COOP chief executive Gideon Muriuki, Jimnah Mbaru of Britam #ticker:BRIT, Centum’s #ticker:ICDC Chris Kirubi and the Ndegwa family, who own a large fraction of NIC Bank #ticker:NIC, had taken a big hit in the months leading to the August 8 polls when activity at the Nairobi Securities Exchange (NSE) sunk to an eight-year low.

But the market has slowly rebounded in the past six months, peaking with last week’s surge that has pushed the key NSE 20 share index to a 16-month high of 4,045 points, from 2,789 points in January, significantly changing the fortunes of the big investors.

The latest market reports show that high-net-worth investors largely held on to their stakes throughout the NSE’s #ticker:NSE two-year bear run, avoiding the panic selling common with retail investors.

Mr Munga, the Equity chairman who also owns a 40.2 per cent stake in insurance firm Britam, is the biggest gainer from the ongoing share price rally, having so far booked a Sh4.74 billion paper wealth appreciation from the two firms.

Britam’s share price has in the past six months risen to Sh15.35 from Sh9.65, while Equity has hit Sh43.25 per share from a low of Sh23.50 six months ago.

Mr Munga’s stake in Britam, which was worth Sh7.5 billion at the end of January, is now worth Sh11.96 billion, while the value of his 15.4 million shares in Equity (a 0.4 per cent stake) has appreciated by Sh304 million to Sh667 million.

Mr Mwangi, the Equity chief executive, has seen the value of his stake in the lender, which stood at 3.4 per cent or 127.8 million shares at the end of December 2016, grow from Sh3 billion in January to Sh5.52 billion at the close of trading yesterday.

Veteran investor Mbaru has gained Sh1.1 billion from his 194.8 million Britam shares, taking his net worth in the firm to Sh2.99 billion.

Benson Wairegi, the Britam chief executive, has also seen the value of his 5.18 per cent (100.4 million shares) in the firm rise by Sh572 million to Sh1.54 billion.

Mr Kirubi, Centum’s biggest individual shareholder, has booked a Sh2.3 billion gain on his 28.3 per cent stake that is now valued at Sh8.29 billion in the wake of the investment firm’s share price rally from Sh31.75 to Sh44 in the last six months.

Also in the list of big gainers is the family of former CBK governor Philip Ndegwa, whose stake in NIC Bank has appreciated by Sh2.56 billion to Sh5.8 billion in the six months. The family owns a quarter of NIC Bank.

nse graphic

Gains after elections

The NSE last week defied the negative sentiments that gripped most sectors of the economy in the wake of a disputed outcome of the General Election to make some of the biggest daily share price gains despite low trading volumes.

READ: NSE trading rises to 23 month high after polls - VIDEO

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Local retail and institutional investors, have taken a bullish stance post the elections departing from a two year trend during which they left the trading floor to foreigners.

The NSE 20 share index on Monday rose above the psychological 4,000 point for the first time since May last year, signalling positive investor sentiments after the polls.

Overall, the investor wealth at the bourse rose Sh677 billion to Sh2.43 trillion in the past six months.

The gains have been spread across different sectors, bringing joy to owners of firms such as WPP ScanGroup, CIC Insurance, Bamburi Cement and Co-operative Bank.

Mr Muriuki, Co-operative Bank chief executive Gideon, who holds a 2.05 per cent stake in the lender and a 4.7 per cent stake in CIC Insurance, has seen the value of his wealth in the two companies grow by Sh930 million to Sh2.5 billion.

Mr Patel’s 5.32 million shares in Bamburi are now valued at Sh1.04 billion, up by Sh240 million, after the cement manufacturer’s share price rose by Sh44 to Sh195 in the last six months.

WPP ScanGroup #ticker:SCAN chief executive Bharat Thakrar has also returned to the billionaire investor list after his 11.96 per cent stake in the firm rose in value to Sh1.09 billion from Sh727 million in January, courtesy of a Sh7.20 share price gain to Sh24.