Investors React to Centum Change of Rules to Allow for Share Repurchase

Centum Investments gained 6.58 percent on a volume of 620,400 shares today, as investors reacted to news that the company has changed its rules to allow it buy back shares from the market at a time the management and board believe the stock is undervalued at the Nairobi Securities Exchange (NSE). The listed investment firm has in its annual report placed its net asset value per share at KES 59 compared to current trading price of Sh40.50 per unit, which would represent a 32 percent undervaluation.

“The company may acquire its own shares in accordance with Part XVI of the Act,” reads a new article which the management hopes will be approved by shareholders during the annual general meeting scheduled for the end of September. Repurchase of own shares reduces the volume of outstanding stock (supply) as some investors sell their holdings to the company.

Centum Investment Co. Ltd announced a Final dividend of KES. 1.00 on 08-Jun-2016; Books Closure 03-Oct-2016. Payment 31-Oct-2016.

Equities

Market activity showed mixed signals on Thursday as the NSE indices sustained in the positive while the rest of the indicators slowed down. The NSE 20 Share index gained 11.67 points to end the day at 3180.29 points while the NASI moved to 130.87 points from 130.75 points previously.

The NSE 25 Share index added 1.86 points to end the day at 3422.56 points. Market capitalization improved from KES 1882.745 billion yesterday to KES 1884.498 billion today, whilst equity turnover dropped to KES 0.58 billion from KES 1.99 before as a result of a 67.73% decline in the number of shares traded.

Currencies

The Kenyan shilling was stable against the dollar on Thursday and it is expected to come under pressure due to dollar demand from retail importers. The Sterling and the Euro lost ground albeit slightly against the shilling owing to the recently UK manufacturing and production data which highlighted the problems that the British economy is facing since the vote to leave the European Union. The problems for Sterling continued yesterday when the NIESR released its latest GDP estimate for the last three months which showed a fall to 0.3%.