Bloomberg News

Centum of Kenya Snaps 4-Day Fall on Valuation: Nairobi Mover

June 20, 2013

Centum Investment Co., Kenya’s largest publicly traded investment group, snapped a four-day losing streak and headed for the biggest gain in more than two months as the company’s valuation lured buyers.

The stock jumped 4.9 percent to 21.50 shillings by the close in the capital, Nairobi, the largest increase since May 2. More than 280,000 shares traded, equal to 89 percent of the three-month daily average.

During the four-day fall, the stock lost 11 percent, cutting its price-to-earnings ratio to 5.83, compared with 14 for the Nairobi Securities Exchange All-Share Index (NSEASI), Africa’s third-best performing gauge this year, according to data compiled by Bloomberg. The NSE 20-Share Index, which measures the biggest companies by market value and trading volume, has a ratio of 16.4.

The “ratio is very attractive and after that drop we are starting to see strong underlying demand,” Ted Macharia, a research analyst at Nairobi-based AIB Capital Ltd., said by phone.

Centum’s profit jumped to 2.51 billion shillings ($29.3 million) in the 12 months through March from 1.19 billion shillings a year earlier, it said on June 5. Investment income more than tripled to 3.91 billion shillings.

Shares of the company that invests in banks, breweries and food processing have surged 74 percent this year, making it the fifth-best performer on the all-share index (KNSMIDX), which gained 26 percent in the period. The measure is the eighth-best performer globally in 2013 among 94 gauges tracked by Bloomberg.

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

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net


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