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Mumias Sugar Co. (MSUG), Kenya’s biggest producer of the sweetener, jumped to the highest in more than eight months on bets full-year earnings will grow.
The stock gained 3.9 percent to 6.70 shillings as of the 3 p.m. close in Nairobi, the capital, the strongest level since Nov. 1, according to data compiled by Bloomberg.
“Guys are taking positions in anticipation of the earnings,” Faith Atiti, an analyst at Nairobi-based Sterling Investment Bank Ltd. said in a phone interview today. “We can expect modest earnings growth and they have quite a good dividend.”
Profit for the six months through December increased 6.2 percent to 881.3 million shillings ($10.5 million), the company said Feb. 3. Mumias was rated strong buy in new coverage by Old Mutual Securities, with a 12-month price estimate of 9.87 shillings, the Nairobi-based brokerage said in May.
Full-year cane production could be slightly lower than a year earlier and earnings will be boosted by higher sugar prices, Atiti said.
Mumias Sugar provides 60 percent of Kenya’s sugar through appointed distributors across the east African nation. The company also exports some of its sugar, at least 20,000 metric tons annually, mainly to the European Union, according to the company’s website.
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