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Oct. 11 (Bloomberg) -- Uchumi Supermarkets Ltd., which resumed trading in May after a five-year suspension, advanced for the first day in as sell-offs by long-time shareholders slowed down.
Shares in Kenya’s only publicly traded retailer climbed as much as 5.3 percent to 8.90 shillings before trading 1.8 percent higher at 8.60 shillings by 10:45 a.m. in the capital, Nairobi.
“We have seen the tail-end of the selling pressure of the people who are selling after holding the stock for so long,” Aly-Khan Satchu, chief executive officer of Rich Management, a Nairobi-based investment adviser to high-net-worth individuals, said in a phone interview today.
The company went into receivership in June 2006 with debts of 2.2 billion shillings ($21 million), of which 957 million shillings was owed to Kenya Commercial Bank Ltd. and PTA Bank Ltd. The receivership ended in March 2010, after most of the company’s debts were cleared and others converted into shares. The shares resumed trading May this year.
“Consumers are price sensitive; I can see a move to get better value for money and I think Uchumi is delivering a better deal for your shilling,” Satchu said.
Kenya is struggling to bring down an inflation rate that soared for the 11th month to 17.3 percent in September, more than triple its 5 percent goal. Investors and lawmakers have criticized the central bank for failing to curb inflation after it lowered the benchmark interest rate to a record low in January and then reversed the decision two months later.
--Editors: Peter Branton, Chris Peterson
To contact the reporter on this story: Eric Ombok in Nairobi at firstname.lastname@example.org
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