By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com
In Summary
Standard Chartered
has lost nearly a quarter of its value at the Nairobi Securities
Exchange (NSE) since the closure of its books for bonus and dividend
issues.
The bank closed Friday at Sh191 a share, down Sh59 from
Sh250 previous Friday when the register on the dividend of Sh17 per
share and a bonus issue of one-for-nine closed.
In the one month between the bonus and dividend
announcement and the closure of the register (March 23 to April 22), the
stock had gained 20.2 per cent.
“The rally before April 22 was driven by the bonus
issue, with investors normally looking to sell at a premium before
registers close on bonus shares,” said Sterling Capital analysts Eric
Munywoki.
“Ideally, when bonus shares are issued the share
price of a counter should naturally adjust downwards in a similar
proportion, and this adjustment starts immediately the register closes.
This is why we have seen the price of Standard Chartered erode.”
Standard Chartered (StanChart) currently has 309.16
million shares in issue, which will rise to 343.5 million when the new
bonus shares are listed.
StanChart which issued a profit warning last
November reported an after-tax profit of Sh6.3 billion last year, down
from Sh10.4 billion in 2014.
It however retained its dividend at Sh17 a share,
keeping one of the highest dividend yields in the market at 8.37 per
cent. This makes the counter attractive to dividend-seeking investors
ahead of book closures.
Only BAT Kenya and Williamson Tea paid a higher dividend a share last year, at Sh49.50 and Sh40 respectively.
Investors in the stock market have in the past
pushed for share splits on a number of nominally highly priced shares
that include StanChart and BAT, saying that this would make them more
accessible to small retail investors who would otherwise be put off by
the high entry price.
Last month, StanChart chief executive officer Lamin
Manjang said that the extra 34.5 million shares will boost the
liquidity of its stock thus removing the need for a share split.
“We have responded on the issue of bonus shares. We believe that is the right thing to do,” Mr Manjang said.
The stock has historically been among the more
illiquid in the market due to the nature of the shareholding, with
Standard Chartered Plc the majority shareholder holding 73.9 per cent
(as per December 2015 filings).
Local institutions hold a further 14.48 per cent in
the lender, leaving just 10.5 per cent in the hands of local retail
investors.
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