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Locals buy Sh11bn more KCB stake


Capital Markets

Locals buy Sh11bn more KCB stake


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A KCB branch in Nairobi. FILE PHOTO | NMG

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Summary

  • Local investors have bought additional Sh10.99 billion KCB stake since Covid-19 struck last March, tightening their grip on Kenya’s largest lender in the wake of foreign investor exits.
  • Latest regulatory filings show that local individual and institutional investors such as pension funds have added 245.742 million shares or 7.65 percent stake between March last year and end of last month.

Local investors have bought additional Sh10.99 billion KCB stake since Covid-19 struck last March, tightening their grip on Kenya’s largest lender in the wake of foreign investor exits.

Latest regulatory filings show that local individual and institutional investors such as pension funds have added 245.742 million shares or 7.65 percent stake between March last year and end of last month.

The additional shares are currently valued at Sh10.99 billion at the Nairobi Securities Exchange (NSE). KCB share closed Tuesday at Sh44.75.

The purchases have given locals a 68.8 percent stake in the period in which the share of foreigners has dipped to 11.44 percent—a record low.

Foreigners have in this period sold 245,742,463 shares—same as what locals have added— meaning that Kenyans capitalised on the exit of foreigners to rise their stake from last March’s 61.15 percent.

“Foreigners were generally exiting the equities especially in emerging and frontier markets and this reflects the changed shareholding in KCB. They were leaving banking stocks because of concerns over non-performing loans,” Sarah Wanga, AIB-AXYS Africa head of research.

She added that foreigners are now softening their selling at the NSE but this is yet to reflect in KCB counter.

The locals’ buying in the last 15 months is 1.85 times more than the 132,204,494 shares that they had made in similar number of months preceding the pandemic.

Foreigners were ditching the high risk equities for low-risk investments to avoid erosion of their wealth, giving room for locals to deepen their shareholding in an environment of falling prices.

Local institutional investors now command 42.43 percent stake followed by local individuals (26.37 percent), government (19.76 percent) and National Social Security Fund (8.04 percent).

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

Collectively, foreigners have now sold 466.52 million shares in KCB between December 2017 and last September, helping local and institutional investors to tighten grip on KCB.



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