Friday, 13 March 2015 01:52
NAIROBI: Kenya’s main share index fell for an eighth consecutive session on Thursday, with loss-making Mumias Sugar dragging stocks lower as investors were put off by its planned cash call.
The shilling closed unchanged.
Kenya’s stock market has lost ground in every trading session since March 2, when the benchmark NSE20 Index hit a seven year high, and fell again on the day despite the bourse’s biggest stock by market capitalisation, Safaricom, scaling an all-time high.
Aly Khan Satchu, an independent trader, said the stock market was nudging lower on profit-taking after the market shot up during a red-hot streak in January and February.
Mumias Sugar lost 5.5 percent to 2.60 shillings, as investors sold the stock on news it planned a cash call to raise 4 billion shillings ($ 43.67 million).
Kenya’s government agreed a 5 billion shilling deal last week with banks to revamp Mumias Sugar, saying some of that money would be raised via a rights issue. The company accounts for a third of Kenya’s sugar output.
“Some people don’t want to pay up for that (rights issue),” said Satchu.
Safaricom’s rise “signalled that we are still very much in a bull market and that this is just a correction,” Satchu said.
Safaricom, Kenya’s largest telecommunications firm and a darling of foreign investors, saw its shares rise 0.6 percent to 15.95 shillings. The stock is up 13.5 percent so far this year.
On the foreign exchange market, the shilling closed trade at 91.65/75 to the dollar, unchanged from Wednesday’s close.
Traders said the local currency was receiving support from central bank liquidity mop ups and dollar inflows from investors planning to buy a 12-year infrastructure bond worth up to 25 billion shillings on March 25.
On the secondary market, government bonds valued at 2.04 billion shillings were traded, down from 2.49 billion shillings on Wednesday.
Copyright Reuters, 2015
