Over the last week, the Mumias Sugar Company share has steadily risen from KES 4.70 at the end of last week to KES 5.50 as at the end of business on Thursday. This is a 17% rise and is quite uncharacteristic of stocks listed under the Manufacturing and Allied segment of the securities exchange.

What could this rise be attributed to? What’s putting upward pressure on the Mumias stock?

The only matter that has brought Mumias Sugar Company to the fore this past week is the announcement by its Board of Directors that the current Managing Director will be stepping down and will be replaced by the current Finance Director with effect from July 1^st.

This therefore must be what is causing this increase in the share price, but how?

Whenever a Managing Director (MD) leaves a company the immediate future of the company is uncertain. This is because the MD leaving ran the company in a certain way and it would take a few weeks or months for the employees and management to adapt to the new chief’s way of working. The new MD would also require a few weeks or months to understand the internal workings of the company. During this grace period the performance of a company is usually stalled as no major expansion projects or investment opportunities can be embarked upon until the new MD has fully assimilated into the modus operandi of the company. Thankfully for Mumias Sugar Company this announcement comes brings along a sense of relief for both employees and shareholders of the company.

This is because the man who has been appointed the new Managing Director, Mr Peter Kebati, has been the Finance Director at the company since April 2003. He has been at the company for 9 years and consequently has considerable experience on the workings of the company. Any ongoing or upcoming projects the company had set to carry out can proceed as planned. This smooth succession has given investors confidence in the share. This increased confidence has driven up the demand for the share and as the principle of demand dictates this increased demand has in turn put upward pressure on the share price as we have observed.

This shows that the NSE is somewhat efficient as information concerning a listed company seems to have an effect on the performance of that company’s share on the exchange.