Bloomberg News

Uchumi of Kenya Rises to 7-Month High on Dividend: Nairobi Mover

March 09, 2012

Uchumi Supermarkets Ltd. (UCSP), Kenya’s only publicly traded retail chain, climbed to a seven-month high on speculation it will pay a dividend.

The shares climbed 6.7 percent to 9.50 shillings at the close of trading in Nairobi, the highest since Aug. 8 and a second day of advances.

The board of directors is likely to deliberate on the company’s dividend policy at the end of the financial year in June, Nairobi-based Kestrel Capital (East Africa) Ltd. said March 5 in an e-mailed note. Pretax profit for the six months through December climbed 26 percent to 204.3 million shillings ($2.5 million, Uchumi said in January.

“The market has realized the company has excess cash and it has to be distributed to shareholders,” Eva Njuguna, a trader at Nairobi-based Sterling Capital Ltd. said in a phone interview today.

Uchumi resumed trading on the Kenyan bourse on May 31 after being suspended when it went into receivership in June 2006 with debt of 2.2 billion shillings. The company emerged from receivership in March 2010, after most of its debts were cleared and others converted into shares.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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