Longhorn Realizes 101 Percent Subscription in New Shares Issue

The Kenyan Market continued to delve further into the red in Tuesday’s trading session. The bourse was characterized by a consecutive downward trend across the board; as both indices and shareholders wealth were not spared. The NSE-20 share index dipped by 1.55% to close at 3866.97 points while the NSE All Share Index followed suit, closing at 145.31 points-down 0.95%. The NSE-25 Share index declined by 1.11% to close at 4179.98 points. Market Capitalization remained relatively supressed, decreasing marginally by 0.69% to close at KES 2,048.17 billion. Equity turnover also shed significant points to close trading at KES0.232Bn, down by a significant 8.97% from the previous trading session. The A/D ratio further illustrated the markets performance, with only 12 counters advancing against 21 decliners.

Following Longhorn Publishers (NSE: LKL) offering of 126 newly created shares, the company realised a 101% subscription indicating investors’ confidence on the counter. Existing shareholders were able to acquire the shares at a rate of 0.86 shares for every share held, with Centum Investment Company Limited (NSE: ICDC) previously announcing its intentions to take up a majority stake in the publishers- with a total spend of KES 390Mn. Longhorn was able to raise a total of KES 533Mn, with plans of using up to KES 80Mn in regional expansion, KES 200Mn in product diversification and retiring current debt obligations (split equally). Despite the publisher owing KES 100Mn to Nabo Capital, a subsidiary of Centum which deals in asset management, the former had recorded a 70% jump in after-tax profit for the six months ended December; powered mainly by a 56% jump in turnover.

Read: Longhorn Publishers Ltd Launch a KES 530Mn Rights Issue

Equity Market Highlights

Safaricom Ltd (NSE: SCOM) was the most actively traded stock today accounting for 33.35% of the total market value traded activity. The Co-operative Bank of Kenya Ltd (NSE: COOP) also registered high levels of activity, accounting for 22.34% of the total market turnover.

Williamson Tea Kenya Ltd (NSE: WTK) topped the gainers list, appreciating by 6.40% to close the day at KES 4.00. Carbacid Investments Ltd (NSE: CARB) went up by 6.00% to close the day as the second best performer at KES 15.90.

B.O.C Kenya Ltd (NSE: BOC) emerged as the top loser of the day, plunging by 8.98% to close at KES 82.00. Eveready East Africa Ltd (NSE: EVRD) similarly lost 7.69% to close at KES 2.40.

Article by Genghis Research.