KenGen gains amid flat energy counters

 

KenGen power generation plant at Ol Karia. The firm is now banking on steam and wind as cheaper, cleaner and more stable sources of power. Photo/FILE 

By CHARLES MWANIKI

In Summary

• KenGen has bet big on geothermal to increase its capacity over the next three years and the Eurobond pledge appears to have lifted investors.

KenGen’s share stood out among flat energy counters, gaining 12 per cent last week ahead of an expected increase in power sector investment by the government.

 

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The power generator’s stock closed trading on Friday at Sh10.90, outperforming other firms in the segment including Kenya Power, which was up 2.7 per cent during the week to close at 13.35.

Oil firms KenolKobil and Total were down 3.3 per cent and 1.9 per cent respectively during the week. KenGen is also expected to announce details of its rights issue from which it is looking to raise Sh15 billion for new generation plants.

Treasury secretary Henry Rotich said last week that part of the Eurobond proceeds would be directed towards energy facilities, especially expansion of transmission lines and geothermal contribution to the grid.

KenGen has bet big on geothermal to increase its capacity over the next three years and the Eurobond pledge appears to have lifted investors. The market was characterised by increased activity on the big cap counters with BAT Kenya, EABL, Safaricom and Equity attracting heavy demand from both local and foreign investors.

“Going forward, large cap counters should remain the larger beneficiaries of increasing foreign inflows in post Eurobond trading,” said Genghis Capital.

The Kenya shilling traded weakened marginally during the week with the CBK mean indicative rate at 87.68 to the dollar on Friday.

Forex traders expect the shilling to hold below the 88 level after the Eurobond receipts increased reserves, enabling the regulator to intervene in the market more if need be.
Reduced inflows from tourism sector and a reduction in export volumes, however, tamper the optimism.