•It traded at Sh1.93 on Friday from its recent lows of Sh1.42.
·Financial expert and economist Mihr Thakar says speculators could be looking for a final gain or a misunderstanding on the nature of the transaction. An investor looks at the digital board at the Nairobi Stock Exchange./ TransCentury share price has gone up 36 per cent a day after it announced intentions to “voluntarily” de-list from the Nairobi Security Exchange (NSE), signalling a strategy by investors to cash out on the stocks.
It traded at Sh1.93 on Friday from its recent lows of Sh1.42, with experts noting that the bulk of the gains came in the last two days after the intention to de-list was announced.
On Thursday, the investment firm trading under NSE’s Alternative Investment Market Segment made a cautionary announcement through the bourse, informing shareholders and the investing public that it had commenced a process that may result in material changes in the Company’s listing status.
“The completion of the process is subject to regulatory and shareholder approvals. Shareholders and the public are therefore advised to exercise caution when dealing in the shares of TC,” Company SecretaryVirginia Ndunge said in the notice.
Its shares closed the day at Sh1.76 after the announcement.
Investment experts have now attributed the excitement on the share to speculation and capital preservation.
“It can be attributed to cartel like behaviour from the majority shareholders to buy as many shares from the market and then leave the minority with worthless shares that they can’t sell,” financial expert and economist Mihr Thakar told the Star.
He also noted that speculators could be looking for a final gain “sell to the next fool” or a misunderstanding on the nature of the transaction.
“The wording of the cautionary statement merely suggests a delisting, which may have been misinterpreted as "buyout",” Thakar said.
According to Thakar, the company is in negative equity of Sh3 billion.Its half year 2019 loss, normalised for a one off gain of Sh1.3 billion, was Sh682 million, down slightly from Sh685 million in the previous year.“Since the full year 2019 results do not seem to be available yet, the debt restructuring exercise undertaken last year may have seen further improvement in terms of finance costs,” he notes.Johnson Denge – investment analyst and director at Pep real estate development and contractors noted that TransCentury delisting is voluntary, hence one of the reasons for the spike in the share price.This is mainly on investor […]