Uchumi Supermarkets Gains 36% in Three Weeks

Mixed trends were observed in Wednesday’s trading even as the bourse sustained the rally that began on Friday last week. The NSE-20 share index gained a marginal 0.07% to close at 4219.89 points while the NASI lost ground by 0.09% to close at 145.51 points. Equity turnover edged up by 142.56% buoyed by heavy trading on Safaricom shares among other large cap counters to close at 1.155Bn whilst the market capitalization lost a negligible 0.09% to KES 2.044Tn. Market conditions had slightly worsened as represented by the A/D ratio which weakened to 0.86x from 1.47x the previous day as decliners outweighed the advancers.

Following the recent appointment of Dr. Julius Kipngétich as the new chief executive for Uchumi Supermarkets (NSE: UCHM), the retail store’s share price has gained significantly by 36% in the last three weeks, currently closing at KES 9.50.

A new programme was launched set to help the mart in refurbishing its store. This comes in the wake of losing customers to competitors due to inadequate supplies. Uchumi has over the years borrowed heavily to offer relief in meeting supplier’s costs but this has continued weighing on the mart’s performance pushing them to alternative means of raising cash such as selling of their assets (Kasarani land). We are optimistic that the changes made in management, in addition to the refurbishment of the stores will help in the turn-around and place the mart back on profitability track. Investors’ confidence has been regained causing the huge gain on the share price.

Equity Market Highlights

Safaricom Ltd (NSE: SCOM) was the most active stock for the day accounting for 65.56% of the total value traded as investors dominated the selling front. Kenya Commercial Bank Ltd (NSE: KCB) closed second accounting for 15.45% of the days traded value. Mumias Sugar Co. Ltd (NSE: MSC) topped the gainers list, surging by 5.71% to close the day at KES 1.85.

Longhorn Publishers Ltd (NSE: LKL) appreciated by 4.20% to close the day as the second best gainer at KES 7.45. Atlas Development & Support Services Ltd (NSE: ADSS) was the top laggard, plummeting by 10.00% to KES 4.05. Express Kenya Ltd (NSE: XPRS) retreated by 10.00% to KES 4.05 to close the day in second place among the top losers.