Will billionaire Kirubi now up stake in Centum Investment?

BY EMMANUEL WERE

NAIROBI, KENYA: The window through which the flamboyant billionaire Chris Kirubi can make a purchase of Sh1billion worth of shares in Centum opened last week.

This is after the investment firm announced its six months result to September 2013.

Centum said its net profits were up 10.6 per cent to Sh892 million in the six months to September 2013 compared with the same period a year ago. Directors of the investment firm have about 30 days, after the company releases its results, to purchase any shares on the counter.

This means Kirubi has until December 13, if the law is followed to the letter, for him to purchase all or part of the 32.6 million shares he received approval to buy.  The share he wants to buy is equivalent to five per cent in the company.

In September, Kirubi bullishly said he was increasing his stake in the investment firm, adding on to the 24.99 per cent he holds.

The market will be waiting to see whether Kirubi starts his purchase within this window. Because of this, speculators might be waiting in the wings, hoping Kirubi will buy them out. But it might not happen, since Kirubi did not get wealth by buying his investments at a high price.

Buy low, sell high is a mantra for many shrewd investors. At the current prices, there is a feeling that Kirubi might wait until investors start exiting the counter.  After all Centum’s shares had traded below the book value for quite some time until their recent rally.

Centum’s shares have more than doubled since the beginning of the year and last week they were trading at Sh31.25. The investment firm has been on a major expansion drive, announcing mega projects in real estate, its intention to go big in the power business and also an entry into agriculture. 

All in the hope of adding value and growing profits at a faster rate.