Uchumi Supermarkets Ltd. (UCSP), Kenya’s only publicly traded retail chain, advanced for a ninth day, rising to its highest in more than six years following a Daily Nation report about a dispute at one of its key competitors.
The stock climbed 3 percent to 19.05 shillings by the 3 p.m. close in Nairobi, the highest level since Feb. 22, 2006, according to data compiled by Bloomberg. The shares have more than doubled this year.
Last week the Kenyan High Court froze bank accounts at Tusky’s Supermarkets amid an on-going dispute among directors, Nairobi-based Daily Nation said May 18 citing Judge Alfred Mabeya. Four brothers who are directors of Tusky’s have been wrangling over the management of the retail chain, it said. Stephen Mukuha Kamau, the company’s managing director, was out of his office when Bloomberg News called seeking comment.
“The main competitor is struggling so investors are buying Uchumi because if the problems at Tusky’s Supermarkets persist, Uchumi will be the biggest beneficiary,” Davis Mika, a Nairobi- based independent stock analyst, said in a phone interview today.
In the year to December 2011, the value of wholesale and retail trade in Kenya grew to 321 billion shillings ($3.80 billion) from 261 billion shillings, according to the latest economy survey released by the Ministry of Planning on May 15.
Uchumi, which opened its first store in Dar es Salaam, Tanzania’s commercial capital, in August and a second one in Uganda, plans to open another seven outlets in the region, three in Uganda and four in Kenya, Managing Director Jonathan Ciano said in September.
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