Bamburi Gains 7.1% On The Proposed Sale Of Hima Cement

By Standard Investment Bank / Published November 16, 2023 | 11:42 am

The bourse sustained its winning streak with the benchmark indices closing the session in the green. The NASI and NSE 20 gained 1.0% with N10 and NSE 25 souring by 1.1% and 0.8% respectively.

Market activity edged upwards, printing a 73.5% growth to USD 0.7m on increased trading on Safaricom. Foreign investors were the key market players in the day, accounting for 80.6% of the activity up from 27.2% in the prior session.

Safaricom was the top-traded stock – accounting for 78.1% of the day’s turnover. The counter gained 1.5% to KES 13.50 on increased foreign trading – returning to its winning streak.

Investors we bullish on banking stocks with KCB Group, Co-op Bank, and Equity Group rallying 8.8%, 2.3%, and 0.7% to KES 18.45, KES 11.30, and KES 37.85 respectively on the back of local demand – ahead of 3Q23 results this month. Notably, KCB Group doubled up as the best-performing top mover and the day’s leading gainer.

EABL and Kenya-Re were the day’s surprise top movers. The latter closed the day as the worst-performing top-mover on a 3.4% slide to KES 1.70 on foreign selling with the former holding a position of relative strength at KES 117.75 as foreigners buffed up their positions.

Bamburi rallied 7.1% to KES 24.10 on the back of the proposed sale of Hima Cement. Our back-of-the-envelope estimates place the sale by Bamburi at c. USD 84m – an indication of a potential special dividend.

KCB Group was the day’s best performer on an 8.8% rally to KES 18.45 while Serena shed 8.3% to KES 11.00, closing as the leading laggard.

Foreign investors were net sellers, recording net outflows of USD 24.6K. KCB Group led the selling charge while EABL led the buying charge.

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Bamburi’s proposed sale of Hima Cement – its Ugandan subsidiary. On 14th November 2023, Bamburi issued a cautionary announcement regarding a proposed sale of 1,335,600 ordinary shares in Hima Cement by Himcem Holdings Limited – a subsidiary of Bamburi Cement Plc. In the share purchase agreement, Sarrai Group and Rwimi Holdings will acquire 100% of the issued share capital of Hima Cement from Cementia Holdings AG (with a current shareholding of 30% in Hima Cement) and Himcem Holdings (with a current shareholding of 70% in Hima Cement). The transaction is Valued at USD 120m subject to adjustments at or after completion.

The Energy and Petroleum Regulatory Authority (EPRA), released fuel prices for the period between 15th November to 14th December 2023. Super petrol prices remain steady at KES 217.36 per liter, while diesel and kerosene decreased by 0.97% and 0.98% to KES 203.47 and KES 203.06 per liter.

The outcome is attributed to the government’s compensation to Oil Marketing Companies (OMCs) of KES 12.01, KES 19.82, and KES 3.64 per liter for super petrol, diesel, and kerosene, respectively, aimed at stabilizing pump prices and consequently alleviating the impact on consumers in the face of a higher cost of living.