The stock, the second-worst performer in Kenya this year, dropped 4.1 percent, the most since June 14, to 9.30 shillings by the 3 p.m. close in the capital Nairobi, the lowest since March 2004. About 113,100 shares were traded, about 32 percent of the three-month average volume.
“The airline industry remains volatile,” Eric Musau, an analyst at Nairobi-based Standard Investment Bank Ltd., said by phone today. “The share price has been rather weak because investors are jittery with regard to how long it will take for the airline to turn around.”
The carrier posted a loss of 7.86 billion shillings ($90.3 million) in the 12 months through March, compared with a profit of 1.66 billion shillings a year earlier, Kenya Airways said June 14. The airline failed to boost passenger numbers and revenue was eroded by a stronger shilling, the company said. The shares have retreated 13 percent since the day before the announcement.
Global airport freight traffic fell 0.4 percent in May while passenger traffic climbed 4.7 percent, according to data from the International Air Transport Association.
“It remains a tough operating environment for the airline industry not only in Kenya but also globally,” Eric Munywoki, a research analyst at Nairobi-based Old Mutual Securities Ltd., said in a phone interview. “The performance is because of losses the company made and the fact that the company did not declare any dividend, which will affect the stock in the short term.”
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