Mumias Sugar Offered a Further KES 5Bn Bailout

Varied trends were observed at the end of the weeks’ trading even as the bourse sustained the rally that began on Monday, cutting back on loses that had been incurred in a couple of weeks. The NSE-20 share index slipped by a marginal 0.18% to close at 4210.02 points while the NASI edged up by 0.18% to close at 146.46 points.

Equity turnover was on a down streak, losing 46.49% to close at KES 0.287Bn buoyed by heavy selling activities on banking stocks whilst the investors’ wealth contracted by 0.18% to KES 2.057Tn. Market conditions had slightly worsened as represented by the A/D ratio which weakened to 0.63x from 1.18x the previous day as decliners outweighed the advancers.

Troubled sugar miller, Mumias Sugar Co. Ltd (NSE: MSC) will yet again receive some piece of cake from the government in form of an additional KES 5Bn bailout. This comes after having received KES 1Bn earlier on in the year. The monies are set to be disbursed between the months of November and December.

Mumias Sugar has been at the centre stage of sugarcane farmers’ woes and operational problems emanating from the factory over the past one year, resulting in the company sinking into losses. The giant sugar firm further stated that the factory is already up and running but more funds were required to improve crushing capacity from the current 400 tonnes per day to the optimum capacity of 8,000 tonnes.

Following the reappointment of Australian Errol Johnston as the new managing director and CEO which took effect on August 1, the firm has already commenced their turnaround strategy, thus we opine that the company is on a journey to recovery.

Equity Market Highlights

Kenya Commercial Bank Ltd (NSE: KCB) was the most active stock for the day accounting for 21.60% of the total value traded as investors dominated the supply side. Equity Group Holdings Ltd (NSE: EQTY) closed second accounting for 19.16% of the days traded value.

Flame Tree Group Holdings Ltd (NSE: FTGH) capped the gainers list, advancing 9.79% to close the day at KES 7.85 on account of positive investor sentiments streaming in throughout the week. Express Kenya Ltd (NSE: XPRS) gained 5.62% to close the day, as the second best gainer at KES 4.70.

Crown Paints Kenya Ltd (NSE: BERG) was the top laggard, slumping by 8.13% to KES 56.50. Standard Group Ltd (NSE: SGL) lost 8.00% to KES 34.50 to emerge as the second biggest loser of the day.