Africa-Press – Kenya. Regulatory approvals for planned acquisitions in the banking sector and the planned listing of Kenya Pipeline dominated debate in Kenya’s capital markets, with investors scrambling for energy and bank stocks.
This saw stocks in those categories soar, with Umeme Limited, Absa Bank, Coop Bank, and KenGen commanding the top five gainers list in the week ended January 22.
During the week, South Africa’s Nedbank Group Limited announced to acquire about 66 per cent of NCBA Bank, Kenya’s fourth-most-valuable listed lender, in a transaction that would rank among the largest cross-border banking deals in East Africa in recent years.
Nedbank said it had secured binding commitments covering 71.2 per cent of NCBA’s issued shares, materially reducing execution risk as the deal enters regulatory review.
The structure would leave the remaining 34 per cent of the bank trading on the NSE as NCBA becomes a subsidiary of the group.
On the same day, the Competition Authority of Kenya approved Zenith’s acquisition of 100 per cent of Paramount, subject to employment safeguards.
Earlier in the week, the much-awaited Initial Public Offer (IPO) for Kenya Pipeline Company was announced at the NSE.
The transaction involves the sale of 11.81 billion existing shares at Sh9.00 per share, with no new shares being issued. Individual shareholders have been allocated 20 per cent of the offer, with a minimum buy of 100 shares.
Institutional investors, foreigners and members of the East African Community have been allocated 20 per cent each, with KPC employees allowed to purchase the remaining five per cent of the 65 per cent stake being sold by the Kenyan government.
The firm’s shares are expected to start trading at NSE on March 9.
Those incidents triggered a flurry of activities at the Nairobi bourse, with the NASI, NSE 25 and NSE 20 share price indices increasing by 0.32 per cent, 0.30 per cent and 0.47 per cent, respectively.
Although the market capitalisation increased by 0.32 per cent to close the week at Sh3.06 trillion, total shares traded and equity turnover decreased by 26.7 per cent and 14.01 per cent, respectively.
In the money market, the Treasury bill auction of January 22 received bids totalling Sh18.3 billion against an advertised amount of Sh24 billion, representing a performance of 76.5 per cent.
This was the first drop in almost eight weeks as interest rates, especially on long-term 182-day and 364-day Treasury bills, declined marginally.
Most investors rushed to buy the Treasury bond switch auction of January 19. The 15-year bond received bids worth Sh26.5 billion against an advertised amount of Sh20 billion, representing a performance of 132.5 per cent.
