Britam share falls below Sh30 after losing Acorn deal
Britam group managing director Benson Wairegi (right) during the listing of the insurer’s corporate bond on the Nairobi Securities Exchange in August 1. PHOTO | DIANA NGILA
What you need to know:
Britam share price closed at Sh29.75, an 8.46 per cent drop from the previous Sh32.50 in Wednesday’s trading.
The insurer’s was one of the big losers in Thursday’s trading session.
Analysts said Acorn’s decision to choose Cytonn, a local private equity firm, as its financing partner for Sh40 billion worth of property deals would result in lost revenue streams for Britam.
Britam’s share price fell below the Sh30 mark in trading Thursday as investors reacted to the listed insurer losing big property projects after Acorn, its partly-owned subsidiary, decided to go for a new transaction adviser.
The insurer’s share price closed at Sh29.75, an 8.46 per cent drop from the previous Sh32.50 in Wednesday’s trading. Britam was one of the big losers in Thursday’s trading session.
Analysts said Acorn’s decision to choose Cytonn, a local private equity firm, as its financing partner for Sh40 billion worth of property deals would result in lost revenue streams for Britam.
“Britam stands to lose its grip in the lucrative property market,” said a market report by Old Mutual Securities.
“The company outlined its strategy to tap into the property market and had also acquired 25 per cent stake of Acorn Group to cement its position. However, the decision by Acorn Group to work with Cytonn Investments will see Britam lose deals worth Sh40 billion.”
Cytonn is a Kenya-based private equity that was formed by four former Britam employees.
“We had to make a decision when they left BAAM. A team is very critical in such projects and we know their capabilities,” said Acorn Group CEO Edward Kirathe on Wednesday.
Britam’s share price has been trading above the Sh30 level over the past few weeks and had touched a historic high of Sh37.75. The last time the share fell below Sh30 was on September 15 when it closed at Sh29.50.
On the winning side, Unga Group, Kakuzi and Kenya Orchards shares continued to trade at historic premiums.
Unga Group’s share price touched Sh56.50, Kenya Orchards Sh122 while Kakuzi’s share hit Sh225.
Unga Group had earlier announced a first and final dividend of 75 cent per share on September 26. Books close for the payout on December 2 while payment will be on January 13.
Kenya Orchard’s share price was also the highest climber in Thursday’s trading but on thin volume of 100 shares. Its share increased by 9.91 per cent to settle at Sh122 from Wednesday’s average price of Sh111.
Overall the NSE 20 Share Index closed at 5272.53 points down 15.53 points while turnover dropped to Sh975.8 million from Sh2.19 million.
The NSE 20 Share Index has dropped for the third consecutive trading session which analysts said was mostly due to foreign investors selling off shares in select stocks.
“Foreign investors were net sellers for the fifth session in a row with participation having stood at 73 per cent versus 34.1 per cent in the previous session,” said a market report by Standard Investment Bank.
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