Jan. 6 (Bloomberg) -- Centum Investment Co., Kenya’s largest investment company, gained for a fourth day on speculation the stock was oversold after the company issued bonus shares last year.
The shares gained 3.6 percent to 14.55 shillings as of 1:23 a.m. in Nairobi, the highest price since Nov. 22, and giving the company its longest winning streak since Nov. 2.
“There is a strong demand because the market is trying to re-rate it; its net present value in 2011 was 18 shillings,” George Bodo, an equity strategist at Nairobi-based Apex Africa Capital Ltd., said by phone today. “The market is coming to the realization that it is undervalued”.
The stock tumbled 35 percent in 2011, ending the year at 13.5 shillings.
In November, Centum offered one bonus share for every 10 held, resulting in the issue of an additional 60.5 million shares to stockholders.
“It fell so much last year because of the bonus shares, which tend to have a dilutive impact when they begin trading,” Bodo said. “The bonus shares also came at a time when the market was doing badly and there was a lot of sell-off regardless of the fundamentals of companies.”
--Editors: Ash Kumar, Peter Branton
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