Wednesday, June 1, 2011

Re-listed Uchumi shares down 21 per cent on comeback to bourse

FREDRICK ONYANGOo | NATION President Kibaki flanked by Trade Minister Chirau Ali Mwakwere and Uchumi Supermarkets chief executive officer Jonathan Ciano rings a bell to mark the return of the retail chain to the Nairobi Stock Exchange on Tuesday. Uchumi shares were suspended from trading five years ago following inability to meet its financial obligations.

FREDRICK ONYANGOo | NATION President Kibaki flanked by Trade Minister Chirau Ali Mwakwere and Uchumi Supermarkets chief executive officer Jonathan Ciano rings a bell to mark the return of the retail chain to the Nairobi Stock Exchange on Tuesday. Uchumi shares were suspended from trading five years ago following inability to meet its financial obligations.  

By JOSEPH BONYO, jbonyo@ke.nationmedia.com

Shares of the now relisted Uchumi Supermarkets dropped 21 per cent on its first day of trading after a five-year suspension.

The counter closed the day at an average Sh12.50 after opening the day’s session at Sh15.90.

In a paid up advertisement announcing its re-entry to the Nairobi Stock Exchange, the retail chain had noted the share would open trading at Sh17.50.

The stock Tuesday opened the trading session at Sh15.90 per share dropping to a low of Sh10.80 before stabilising at an average of Sh12.40 for most part of the day.

On its debut, the trading bands normally applied for the market were relaxed to ensure it gained a fair price value.

During the relisting, that was witnessed by, among others, President Kibaki, the retail giant managed to move 1,674,400 shares. It has 180 million shares listed and available for trading at the market.

“The turn around of Uchumi Supermarket is a welcome development not only to the direct shareholders but also to our economy as a whole,” the President said.

Expectations had been high among the shareholders of the listed firm after staying out of the counters since June 2006 that they would recoup their investments when their stock went back to the market.

Speaking during the ceremony at the trading floor, Trade Minister Chirau Ali Makwere said that the government would soon divest from the company.

“Within a reasonable timeframe, the government will have to sell its shares to the members of the public,” the minister said.

Currently, the State owns 20.37 per cent of the supermarket together with its other agencies Kenya Wine Agencies Ltd and Industrial and Commercial Development Corporation (ICDC).

President Kibaki praised the comeback of the supermarket, describing it as a worthwhile gift for Kenya as the country celebrates its 48th anniversary of independence this year.

The suspension had locked up to Sh2.6 billion owned by about 12,000 shareholders calculated at Sh14.50, which was the last trading price at NSE before it went under.

Back on its feet

Finance Minister Uhuru Kenyatta said that the company was back on its feet and ready to reclaim its position at the helm of Kenya’s retail market.

“Uchumi is now profitable and will get back to its top position in the market,” Mr Kenyatta said.

In April, Capital Markets Authority approved the return of Uchumi to the NSE under a set of conditions that included proof that the assets in its books had no encumbrances.

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