2014 leaves NSE billionaires with share sale windfall

Money Markets

Industrialisation and Enterprise secretary Adan Mohamed rings the bell to officially launch trading for the Nairobi Securities Exchange on September 9, 2014. PHOTO | SALATON NJAU |  NATION MEDIA GROUP

By VICTOR JUMA, vjuma@ke.nationmedia.com

In Summary

• The transactions reflected a mix of profit-taking in share rallies, capital-raising activities, and exits from depressed stocks to cut losses.
• Billionaire investor Baloobhai Patel topped the list of the biggest beneficiaries of 2014’s stock market rally, earning more than Sh100 million from partial sale of his stock holdings.
• Scores of retail investors also booked significant combined earnings from share sales by the NSE and Centum where they are shareholders.

Billionaire investor Baloobhai Patel topped the list of the biggest beneficiaries of 2014’s stock market rally, earning more than Sh100 million from partial sale of his stock holdings.

Investment banker Jimnah Mbaru and TransCentury shareholders Zephania Mbugua, Peter Kanyago, Eddy Njoroge, Stephen Waruhiu, and Ephraim Njogu, who earned between Sh25.9 million and Sh78 million from trading shares, made the list of top winners of the stock market game.

READ: Top TransCentury investors offload 13.1 million shares

Thousands of shareholders in investment firm Centum and the Nairobi Securities Exchange (NSE), including stockbrokers, also benefited indirectly from the sale of shares by the two companies.

The transactions reflected a mix of profit-taking in share rallies, capital-raising activities, and exits from depressed stocks to cut losses.

Mr Patel, for instance, sold five million Safaricom shares he had held for more than three years. The trades, coming at a time when the stock had rallied to new highs, are estimated to have earned him over Sh60 million.

Safaricom’s share price recently touched a record of Sh15, triple its 2008 listing price of Sh5 in what has been linked to increased investor confidence in the stock on the back of its rising profitability.

Mr Patel also disposed of his 17 million shares in sugar miller Mumias for an estimated Sh42 million, exiting the loss-making firm that has suffered from increased competition and alleged management fraud.

READ: Mumias stock shrinks to 91pc of State offer price

The businessman sold the stock before it plunged below Sh2, a record low for the miller that is crafting a strategy to lift it out of the loss-making hole in which it has been trapped for two years.

The recent share sales are unique for Mr Patel who hardly trades his stocks, preferring to hold or boost his equity position in a number of publicly traded firms.

The largest sell-offs by individual investors were concentrated in the stock of investment firm TransCentury, whose chairman Mr Mbugua sold three million units for about Sh78 million.

Mr Njoroge traded 2.6 million units for an estimated Sh67.3 million while Mr Kanyago sold 2.5 million units for Sh64.7 million. Mr Mbaru disposed of 2.4 million units for Sh64.5 million.

Mr Waruhiu traded 1.5 million units for Sh38 million as Mr Njogu kept his sale to a maximum of one million shares that earned him Sh25 million.

The trades came as the TransCentury stock traded at an average of Sh25 or half its listing price of Sh50 in 2011.