Significant changes to companies’ shareholding, including acquisitions, helped lift equities trading at the Nairobi Securities Exchange (NSE) to a three-year high last year.
Corporate action on counters such as I&M Group and Bamburi Cement helped lift overall equity turnover for 2024 to Sh105.9 billion, up from Sh88.2 billion in 2023.
Activity in the two companies generated high investor interest as measured by turnover with the firms emerging among the top traded stocks for the 12 months ended December 2024.
Bamburi, which became the subject of a takeover offer from Tanzania-based conglomerate Amsons Industries was for instance the most traded counter in the fourth quarter of 2024, beating traditional market leaders including Safaricom and Equity Group.
Safaricom and Equity, which had no major transactions in the quarter, ended the three months with turnovers of Sh7.4 billion and Sh2.5 billion, respectively.
The counter registered a turnover of Sh22.7 billion in the final three months of the year or 56.6 percent of the Sh40.1 billion total turnover registered in the quarter.
Bamburi shareholders transferred shares in bulk to Amsons in December at a buyout price of Sh65 per share where the acquirer took possession of at least 96.4 percent or the cement manufacturer’s 362.96 million issued shares, marking the success of the offer.
Amsons now has the option of compulsorily buying out any remaining shareholders who did not participate in the offer while it can also delist Bamburi Cement from the Nairobi bourse.
I&M was meanwhile the most traded counter in the second quarter of 2024 with a cumulative turnover of Sh8.3 billion or 29.3 percent of the Sh28.3 billion total turnover in the three months.
The bank was the subject of a deal to sell additional shares to its fourth largest shareholder –East Africa Growth Holding (EAGH).
The Mauritius-based company which is affiliated with the AfricInvest private equity initially purchased a 10.13 percent stake in the bank from the British International Investment (BII) before moving for an additional 4.97 percent stake by buying 86.5 million new shares.
The second stake sale was implemented at a premium of Sh48.42 per share, a 93 percent premium to the then prevailing Sh25.05 a unit price.
I&M share price and trading volumes at the bourse rose in the aftermath of the announcement with the stock price closing last year at Sh36.25, doubling from Sh17.5 at the end of 2023.
Private deals traditionally contain a premium to entice the party holding the shares to sell, with the buyer looking at factors such as potential income after the deal and the valuation of similar transactions elsewhere.
Previous corporate action has also served to revitalise equities trading at the NSE with acquisitions by major shareholders driving interest in the counters by other investors including retailers.
East African Breweries Plc (EABL) majority shareholder Diageo for instance drove interest in the counter across 2023 as the multinational moved to raise its stake in the regional brewer to 65 percent from 50.03 per cent by buying 118.4 million shares.
Diageo took the extra stake by paying a premium of Sh192 which was 39 percent higher than the prevailing Sh138 share price before the announcement of the offer.