Business Daily (Nairobi)
24 December 2011
City Trust was the highest gainer of 2011, driven by the announcement that it was in talks that could lead to the acquisition of a regional bank.
City Trust’s stock surged to Sh280 from Sh160, a 94 per cent increase.
Analysts said the announcement was the main driver of the share price gain, as there was not much activity by the firm.
Williamson Tea
Agricultural stocks were big gainers in 2011, a year when stocks at the Nairobi Securities Exchange touched lows last seen in 2009 when Kenya’s economy was recovering from the post-poll violence and the global financial crisis.
Williamson Tea was the second highest gaining stock in 2011, propped up by good tea prices in the international markets.
A weak shilling and sale of the firm’s headquarters also boosted Williamson’s earnings, pushing the share 54.1 per cent up to Sh285 from Sh185. The turnover rose marginally to Sh1.56 billion from Sh1.51 billion in the first half of 2010.
“The Group’s performance for the six months was boosted by the favourable exchange rates and improved tea prices…the group realised the sale of its investment in Williamson House and gains realised are included,” said the firm when it released its first half results in November.
These factors cushioned Williamson’s earnings for the first half of the year when production is thought to have taken a hit from a severe drought.
Analysts said the expected improved production will work in favour of the tea firms, but the listed agriculturals are cautious to predict strong results for next year.
“The performance of the remaining period to year end will be impacted by the behaviour of the Kenyan shilling against foreign currencies and an increase in operational costs. The directors therefore do not expect the current performance to be replicated in the remaining part of the financial period,” said Williamson Tea while releasing its half year results.
Kapchorua Tea
Kapchorua Tea’s share price similar to its peer, Williamson Tea, which was also the beneficiary of improved international tea prices.
The listed agricultural’s share is trading at Sh125, an increase of 25 per cent rise from this year’s opening price of Sh100.
The onset of the short rains season towards the end of the year also has raised expectations that agricultural stocks will record improved production this year, lifting their share prices at the stock market.
Limuru Tea
Limuru Tea share price increased by 13.3 per cent to Sh340 from Sh300. This price is also sustained by low volatility due to the high nominal price which makes the stock illiquid.
CMC
Shares of Kenya’s third largest automobiles dealer, CMC Motors, was one of the top gainers in 2011 before a boardroom spat that resulted in the suspension of trading in the firm’s shares.
The stock had gained 10.2 per cent to Sh13.50 from Sh12.50 before the suspension.
In September news of the boardroom wrangles became public, leading to Joel Kibe taking over as the new chairman of the board, replacing Peter Muthoka who had held the position for five months.
Losers
AccessKenya
AccessKenya is so far the worst performing stock at the NSE, dropping to Sh5, half the Sh10 listing price of June 2007. Investors interest in the stock waned as competition in the IT sector intensified. Overall, the share price dropped by 64 per cent in the year to Sh5 from Sh14.30.
The Internet firm is counting on cost-cutting to post full-year profits.
It doubled its half-year profit despite a drop in sales to Sh876 million from Sh852 million due to a price war that saw the Internet provider cut prices to protect marketshare.
Despite this, net profit for the six months to June stood at Sh61.7 million compared to Sh30.6 million — a performance it hopes will overturn the Sh7.9 million loss incurred last year.
The firm hedged its forex exposure and has renegotiated its bandwidth contracts with international cable owners. Analysts say the twin moves will be the key profit drivers in the second half.
Kenya Airways
National carrier Kenya Airway’s (KQ) share price dropped to Sh20 from Sh46.75, a 57 per cent drop in a year when management announced plans to float a rights issue.
Analysts said expectations that rights issue would be offered at a discount weighed down on the market price.
In a cautionary statement, KQ said the capital raised would be used to finance its growth and expansion plans. The company has set out a Sh270 billion expansion plan in the next five years, with intentions of doubling its airplane fleet while introducing a cargo line. Half of the amount is to be raised from reserved earnings, while the balance would be sourced from debt and equity.
Uchumi
Uchumi shares fell by 53 per cent from Sh14.50 to Sh6.80 after the firm’s five-year suspension from the bourse was lifted.Analysts attributed the fall to dumping of the stock by shareholders whose investment was locked in for five years after Uchumi’s shares were suspended from trading. They added that most sellers were retail investors who were impatient to bet on a future price upswing.
Express Kenya
Transport and logistics company Express Kenya’s share price dropped by 50 per cent to Sh3.90 from Sh7.75 as investors reacted to loss of a key beer transportation contract with East African Breweries Limited (EABL).
The NSE-listed firm announced a 42.7 per cent plunge in half-year revenues to Sh253 million.
The loss in revenues pushed Express Kenya into a Sh55 million loss compared to a Sh25.8 million net profit earned in the first six months 2010.
Express Kenya said it plans to sell its non-core assets as part of a strategy to cut soaring costs and lift the firm from loss-making.
HF
Mortgager Housing Finance (HF) was the only financial stock amongst the biggest losers, with its share price dropping by 51.3 per cent to Sh12.90 from Sh26.50.
Analysts said that the main reason was that in a high interest environment it would suffer more than other banks as the bulk of its revenues come from interest income, unlike peer lenders who lean on transactional income.
(Figures as at 16th December)
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