Money Markets
Mr Lamin Manjang, Standard Chartered Kenya chief executive officer. PHOTO | FILE
By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
- StanChart's stock is currently trading at Sh302 a share, making it the most priced bank counter and out of reach of many retail investors.
- The bank had the second lowest turnover among the top 20 largest companies at the bourse in the first six months of the year.
Standard Chartered Kenya
has forwarded a share split proposal to its parent company in response
to shareholder complaints about the poor liquidity on the counter.
The bank’s stock is currently trading at Sh302 a share,
making it the most priced bank counter and out of reach of many retail
investors.
“We have discussed it at the board level and
escalated it to majority shareholders because it is one of the issues
that came up at the annual general meeting. It is being discussed,” said
chief executive Lamin Manjang.
A share split increases the number of shares of a
company by dividing a stock while maintaining its market capitalisation.
It often increases trades and prices in Kenya.
Data from the Nairobi Securities Exchange shows the
bank had the second lowest turnover among the top 20 largest companies
at the bourse in the first six months of the year. Cross-listed Ugandan
power firm Umeme. had a lower turnover.
But despite the low turnover Stanchart was ranked
the third most attractive banking counter at the bourse in a report
released on Monday by investment firm, Cytonn.
Its majority shareholder, Standard Chartered Plc,
hogs 74 per cent of the shares in the local unit, underlining the
importance of it approving the split proposal.
StanChart’s share price has shrunk 13.6 per cent in the last three months following a trend among the banking counters.
The low volume of free floating shares has been cited by analysts as a hindrance to the price discovery of the counter.
Barclays Bank
is the last lender to have conducted a share split, done when the stock
was trading at Sh67 a unit in 2011 in the ratio of four for each held.
Equity Bank split its share 10 times five years ago when it was trading at Sh125 a share.
Stanchart is currently in the process of cleaning
up its loan book following a jump in non-performing debt last year. Mr
Manjang said the bad book had dropped to seven per cent of its total
loans in May from 11 per cent at the end of last year.
The jump in bad loans was one of the factors
leading to a slump in the banks’ profitability by 30 per cent in the
first quarter of the year.
The bank also hopes to reap from a restructuring
process conducted last year and booking of new loans especially to small
and medium sized enterprises (SMEs).
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