Baby’s Day Out: Flame Tree Group Impresses On Its First Day At The NSE
Flame Tree Group Holdings Limited (FTGH) listed today via introduction at the Nairobi Securities Exchange (NSE). Its introductory share price was KES 8.00, which rose to KES 13.00 and ended the day at KES 14.00. The company was listed on the Growth Enterprise Market Segment (GEMS) and saw over 400,000 shares traded.
Flame Tree has subsidiaries within the Eastern Africa region dealing in plastic goods, fast moving consumer goods (FMCG) and trading. Under plastics the company sells the Roto water tanks brand in Kenya, Ethiopia and Rwanda. Its Mozambique subsidiary Rino Tanques Lda deals in water and sanitation systems in Maputo and Pemba.
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A 'Roto' tank manufactured by Flame Tree[/caption]
The company has also made forays into the cosmetics business. Its consumer brands in the beauty industry are Zoe lotions, Zoe hair care, Alana Hand & Body Lotions and Cerro Nail Care. Its Rwandan subsidiary Buildmart Limited is an industrial trading company. Buildmart specializes in supplying of various hardware materials including pipes, water tanks, gate valves and various other plumbing and construction materials to the Rwanda market.
Flame tree's closing price represented a 75% increase over its opening price. The positive reaction according to Silha Rasugu a Research Analyst at Genghis Capital Limited can be primarily attributed to investors trying out the new counter, taking a chance of obtaining good returns. This is more so considering that the NSE has in the past few weeks been on a steady decline, a new share would thus attract investors who would hope it offers a new favourable opportunity in contrast to the general market decline.
"The share's listing price at eight shillings was also attractive to retail investors, whose participation on the counter was very high." Silha added. "Moreover, some investors probably considered the company's ventures in the fast moving consumer goods segment as an opportunity for future growth."
Most companies' shares typically experience a price gain immediately after listing on the NSE as they start their price discovery journey. Home Afrika Limited (HAFR), the first company to list on the GEMS, also experienced a price increment immediately after listing. It rose from KES 10.00 to KES 25.00 before declining. HAFR closed at KES 4.00 today.
Read: Unga Gains While Home Afrika Slumps At The NSE
Here at Abacus we will continue to follow the performance of Flame Tree Group and keep you abreast of any developments.
Most shares traded:
Safaricom Limited (SCOM), Uchumi Supermarkets Limited (UCHM), Mumias Sugar Company Limited (MSC), Kenya Reinsurance Corporation Limited (KNRE) and Equity Bank Limited (EQTY). Over 25.77 million Safaricom shares changed hands today representing 70% of all shares traded.
Indices
Both the NSE 20 share index and the NSE All Share Index (NASI) declined today. Shedding 0.49% and 0.05%, each closed at 5,075.93 and 159.13 respectively.
