Kenya Airways stock up 4pc on Jambojet optimism

Kenya Airways launched Jambojet to Mombasa, Kisumu and Eldoret at a cost of Sh2, 850 on April 1, 2014.   Photo/PHOEBE OKALL

In Summary

• Jambojet is expected to target the market segment currently occupied by buses, with initial flights between Nairobi and Mombasa, Kisumu and Eldoret.

By CHARLES MWANIKI
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Kenya Airways shares gained nearly four per cent on Tuesday as investors reacted to the start of operations of the airline’s low cost carrier Jambojet.

(READ: JamboJet eyes eastern Africa after take-off)

The share closed at Sh12.95, up from the opening price of Sh12.50. The stock saw a trading high of Sh13.15, arresting a mini slide that saw it lose over a shilling in value in the past week.

Jambojet, a wholly owned subsidiary, is expected to target the market segment currently occupied by buses, with initial flights between Nairobi and Mombasa, Kisumu and Eldoret.

Other gainers in the market included the oil marketers Total and KenolKobil, up 3.3 per cent and 2.5 per cent respectively on investor expectations of improved full year 2013 results.

LIMITED MOVEMENT

Total closed at Sh23.75 per share and Kenol Kobil Sh10.35 per share.

But the market was largely flat, with the NSE All Share index down 0.1 points to 143 and the NSE 20 Share index up 14 points to 4959 as major counters saw limited price movement.

Market capitalisation slipped below the Sh2 trillion mark to end the day at Sh1.99 trillion.

In Wednesday’s trading, investors will watch closely the Transcentury share, which was suspended from trading on Tuesday following the announcement of the sale of its 34 per cent stake in Rift Valley Railways to Egyptian investment firm Citadel.

DOWNWARD TREND

“No price was disclosed but the stake was valued at Sh3.8 billion in 2012, suggesting a potential transaction value of between Sh4 and 6 billion, with an estimated Internal Rate of Return of at least 25 per cent,” said Standard Investment Bank in their daily market report.

The leading decliners Tuesday were East Africa Portland Cement, which dropped 9.3 per cent to Sh83 from Sh91.50, while Carbacid and National Bank both declined by five per cent to Sh32.75 and Sh28.25 respectively.

BAT continued its downward trend following closure of its books last Friday on a Sh33.50 dividend, with the share ending the day at Sh611, having touched a high of Sh635 last week.

This article first appeared in the Business Daily.