KQ plane departs from JKIA. Kenya Airways share price has gone up 31 per cent in value; a week after a proposed law seeking to collapse it into an Aviation holding company was tabled in the Parliament.
The share, which traded at Sh2.50 Thursday last week, has been gaining 10 per cent since Monday, rising to Sh3.28 Tuesday where it moved 1.3 million shares, highest since January.
Yesterday, the share price rose to a high of Sh3.60 by lunchtime as captured by Mystock, a real-time Nairobi Securities Exchange tracker.
Capital market analysts have attributed the current appetite for KQ’s s share to the planned buyout as the airline readies for nationalisation.
Mihr Thakar, a Mombasa based financial analyst said the scramble for the airline’s share is likely to intensify as the planned nationalisation nears.
”Buyout loading. Five baggers for those who picked the bottom barely two months ago,’’ Mihr said.
On April 22, the airline’s share dropped below the Sh1 mark to trade at Sh0.97, sunk by pressure from the airline’s financial woes that have been worsened by international travel restrictions.
Peter Karunga, told the Star that investors are hoping for a premium when the government buys out minority shares.
‘’It is the right place to put your money. Those who bought in April at below a shilling are merrymaking. They are likely to earn up to 12 times,’’ Karunga said.
During the firm’s Annual General Meeting (AGM) held last Friday KQ chairman Michael Joseph was at pains to explain the firm’s perennial poor results, denying shareholders dividends for three consecutive financial years.
The airline reported a gross loss of Sh12.98 billion in the year ended December 2019; a 71 per cent drop compared to Sh7.55 billion loss the previous year.The carrier attributed the loss increased operational costs that grew by 12.4 per cent to Sh129.1 billion compared to Sh114.8 billion the previous year.The poor results saw shareholders incur Sh2.23 loss per share, almost double the Sh1.30 loss reported in the previous financial year."It is unlikely for dividends to be paid out anytime soon. It is painful but we hope that the proposed nationalisation will see shareholders earn a premium on their shares after the valuation that will factor in sacrifices made," he said.At the AGM, shareholders welcomed the National Aviation Management Bill, 2020 seeking to create an aviation holding company under which the airline’s balance sheet will be merged with Kenya Airport Authority.According to the proposed law sponsored […]