At 3.10 pm today when the Nairobi Securities Exchange (NSE) closed, Kakuzi Limited (KUKZ) was the top gainer. It rose 7.69% to KES 210.00 compared to its previous close of KES 195.00. Since the beginning of the year the share has appreciated by over 114%. Therefore, if in January you bought Kakuzi shares worth KES 1 million, then as of today you they would be worth KES 2.14 million.
Kakuzi’s core business is the cultivation of tea, growing, packing and selling of avocados, livestock farming, growing and selling of pineapples, forestry and macadamia development.
The company’s share price has been on the increase despite its lately reduced profits. At the end of 2010, the company’s profits after tax were KES 385 million. This rose to 648m in 2011 before declining to KES 405m and 176m in the subsequent years. Declining global tea prices were attributed as the cause of the reduced profits in 2013. In the first six months of 2014, Kakuzi’s profits have declined 36.5% to KES 49 million compared to KES 77m as at 30th, June last year. The slump was caused by the further decline of tea prices in the recent months.
Kakuzi paid a dividend of KES 3.75 a share last year representing a dividend pay out ratio of 44.5% of the total earnings per share. (KES 8.42).
According to Silha Rasugu a Research Analyst at Genghis Capital, agricultural firms on the NSE have had a decline in earnings in recent months. This is because most of them deal in tea and coffee whose international prices have gone down. “In such times of uncertainty, investors tend to be attracted to counters that pay out high dividends as was the case with Kakuzi recently” he said.
Moreover, Kakuzi own large amounts of land and investors may be trying to factor in the value of this land in the share price. “Although, the company has not given any intention of putting the land to any other use.” Mr Rasugu added.
Kakuzi’s share price performance for the last 12 months is given below:
The winners:
The other top gainers were: Marshalls East Africa Limited (MASH), KenolKobil Limited (KENO), Safaricom Limited (SCOM) and Kenya Electricity Generating Company Limited -Kengen- (KEGN). They closed at KES 10.00, 9.10, 13.50 and 10.00 respectively.
Read: NSE Closing Bell: Kenol Kobil Among Top Gainers
The losers:
The counters that shed the most value were: Flame Tree Group Holdings Limited (FTGH), British American Tobacco Kenya Limited (BAT), National Bank Of Kenya Limited (NBK), Standard Group Limited (SGL) and Kapchorua Tea Company Limited (KAPC). They ended the day at KES 9.70, 910.00, 23.75, 33.50 and 130.00 respectively.
Market snapshot
As at 3.10 pm today.
Most shares traded:
Safaricom, Equity Bank Limited (EQTY), Kenol Kobil, Kenya Commercial Bank Limited (KCB) and Mumias Sugar Company Limited (MSC). Over 24.8 million Safaricom shares changed hands today representing 49.8% of all shares traded.
