The market data shows that among actively traded stocks, 27 or 47 per cent of the companies registered gains while 30 or 53 per cent posted losses. FILE PHOTO | NMG Troubled Kenya Airways leads a group of loss-making companies to emerge with the best stocks from a period when the country imposed tight coronavirus restrictions and the market shed Sh18 billion.
Bamburi Cement ranks worst.
The KQ share gained 127 percent since March 13, when the first case was confirmed, and closed trading at Sh3.83 on July 3 when it was suspended from trading on the Nairobi Securities Exchange (NSE) .
This means an investor who put Sh1 million in the stock on March 13 has gained Sh1, 270,000.
In contrast, investors who bought Bamburi shares worth Sh1 million suffered a loss of Sh480,000 given the share has shed 48 per cent since Kenya reported its first case of coronavirus to stand at Sh26.10 at the close of trading Thursday.
This analysis is based on investors who bought shares in mid-March and measures their return at the end of the trading yesterday.
The review does not capture speculators who enter and exit stocks in short periods.
The market data shows that among actively traded stocks, 27 or 47 per cent of the companies registered gains while 30 or 53 per cent posted losses.
While the Covid-19 pandemic has been blamed for the overall market decline that has seen the benchmark NSE-20 Index drop to levels last seen in 2003, the performance of individual stocks has been driven by speculators with little link to a firm’s business indicators.
Williamson Tea is the only profitable firm among the top five best-performing stocks that includes Sameer Africa , East Africa Cables and struggling Uchumi Supermarket .
Hotel operator TPS Eastern Africa , for instance, dropped by a marginal 0.4 per cent to Sh13.45 despite being among the victims of the ban on international travel. Cigarette maker BAT Kenya also dropped 22.8 per cent to Sh310 despite improved profitability that was partly caused by lower taxes.The jump in KQ shares was driven by investors accumulating the airline’s stock in anticipation of being bought out later at a premium by the government, which plans to nationalise the company.The expectation led investors to ignore the firm’s losses and negative equity which stood at Sh12.9 billion and Sh17.8 billion respectively in the year ended December 2019.Details of KQ’s nationalisation, including the price at which the […]