Buy UAP shares over the counter for good returns
What you need to know:
- Buying UAP over-the-counter presents a real-time opportunity to rake in huge profits when the stock lists on the NSE
- An update report by Genghis Capital, which together with CFC Stanbic Financial Services handle the trading of UAP shares, notes that UAP Insurance intends to list on the NSE in the next 18 months
UAP INSURANCE: The OTC (over-the-counter) market is a rare gold mine that many investors hardly know or participate in. This is the stock for a medium and long-term investor waiting to reap huge profits when the stock lists at the NSE in the coming months.
After listing at the over-the-counter market in January last year, UAP’s market value hit Sh13 billion. This valuation effectively made it the biggest insurer in Kenya, based on market capitalisation. The stock listed at Sh60 per share, with 211 million shares issued. The insurer is currently worth Sh16.4 billion, based on market valuation.
According to Ndindi Nyoro, head of Investax Capital, buying UAP over-the-counter presents a real-time opportunity to rake in huge profits when the stock lists on the NSE. “Stocks that list under the OTC market and go on to list on the NSE inevitably rise in price valuation,” he says.
An update report by Genghis Capital, which together with CFC Stanbic Financial Services handle the trading of UAP shares, notes that UAP Insurance intends to list on the NSE in the next 18 months.
REGIONAL PRESENCE
Muammar Ismaily, head of research at Sterling Capital, says UAP stands to offer one of the best investment returns. “It has a prominent regional presence and has diversified well in life and non-life policies,” he says.
The company’s entry into property development in Kenya, South Sudan, and Uganda will help raise its value and push the price up,” Nyoro concurs, adding that UAP will not disappoint. “The company has been growing solid in its investments and product diversification. These are key pointers to its strength.”
He adds that investors should learn from CIC Insurance’s performance at the OTC market and the subsequent share performance after listing on the NSE. “CIC had a rights issue in 2010 at Sh27 per share. They listed in 2012, 18 months later, with a share split of 20. The stock came to the market at Sh5 per share. Today, the stock is trading at Sh7.5 a share. This means that an investment of Sh210,000 is now worth Sh1.5 million,” he says.
Longhorn is another company whose shares traded at the OTC market before listing on the NSE. After listing, the stock has traded at a high of Sh16.50. It is now at Sh13.10.
Ismaily says that with the UAP stock currently trading at Sh78 per share over-the-counter, the price should be in excess of Sh100 per share once it lists on NSE. Nyoro recommends an entry of Sh80 per share.
