Foreigners halt KCB stake sale as NSE prices steady

KCB CEO Joshua Oigara. [Maxwell Agwanda, Standard]

Foreign investors have halted the sale of KCB shares for the first time in 21 months amid recovering prices of equities at the Nairobi bourse.

The latest disclosures by the KCB Group shows that foreign investors added 5.26 million shares in the three months ended September, stopping their stake in the lender from falling below 10 per cent.

The added shares - currently valued at Sh234.6 million when calculated using the price of Sh44.60 per share - took their stake to 11.61 per cent in September from an all-time low of 11.44 per cent set in June.

This was the first time for foreign investors to raise their stake in Kenya’s second-largest lender by asset base since Covid-19 struck Kenya in mid-March last year.

Foreigners and local institutional investors benefited from the decision by local individuals to sell 8.11 million shares, currently valued at about Sh361.7 million.

At 372.995 million, the foreign investors’ shares in KCB are, however, 47 per cent lower than the high of 704.948 million, or 21.94 per cent stake, that they held at the end of December 2019.

Local institutional investors tightened their grip on KCB by adding 2.85 million shares in the review period to take their stake to a new high of 42.51 per cent.

The current shareholding structure differs sharply from that of the end of 2017 when foreigners were the top shareholders in KCB with a stake of 29.21 per cent.

Foreign investors account for about 70 per cent of trading activities at the Nairobi Securities Exchange (NSE), and their interest in large stocks means they dictate the direction of the bourse.

Covid-19 had blunted the attractiveness of equities, leading to price plunges as investors sought shelter in fixed income and gold to protect their wealth.