City Trust of Kenya Shares Head for Record High: Nairobi Mover

City Trust Ltd. (CTRL) surged toward a record after a newspaper report said the Kenyan investment company’s proposed merger with a bank will boost its market value.

The stock surged by the maximum daily limit of 10 percent to 440 shillings by 2:03 p.m. in the capital, Nairobi. A close at this level will be the highest since May 20, 1997, when Bloomberg began compiling data on the stock. About 52 percent of the three-month daily average volume of shares were traded.

The proposed merger with Nairobi-based I&M Bank Ltd. may be worth 29 billion shillings ($330.7 million), Business Daily reported, citing documents from the companies. City Trust has a market value of 2.52 billion shillings now.

“Based on 2011 earnings, the company would easily come into the market at a level of between 80 shillings and 100 shillings per share,” Francis Mwangi, head of research at Nairobi-based Standard Investment Bank Ltd., said in a phone interview.

Under the planned merger announced on Dec. 24, City Trust shares will be split five times, placing the current market price at 88 shillings.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.