Total Kenya Ltd., the unit of Europe’s third-largest oil company, headed for the biggest gain in more than a week as moves to boost exports to neighboring nations prompted a buy rating from Genghis Capital Ltd.
The stock rallied as much as 8 percent before trading 1.2 percent higher at 16.50 shillings by 2:48 p.m. in the capital, Nairobi, the most on a closing basis since Aug. 15. About 3.2 times the three-month daily average of shares were traded.
Genghis set a price target of 23.96 shillings on the stock, Head of Research Muammar Ismaily said by phone today from Nairobi. The recommendation was first made in a note yesterday. Total Kenya diversified its income through exports to countries including Zambia and the Democratic Republic of Congo after Kenya’s Energy Regulatory Commission introduced price controls in 2011, curbing profit, Ismaily said.
“They are in a better fuel-supply position than KenolKobil and are increasing exports significantly due to winning a number of contracts to several landlocked countries,” he said, referring to Kenya’s biggest fuel retailer by market value, KenolKobil Ltd.
Total Kenya doubled its storage capacity for liquefied petroleum gas, used for cooking, to 300 metric tons and decreased its debt level was after Total SA (FP) bought preference stock, he said. That has “given them impetus to go into projects they may have shied away from in the past,” Ismaily said.
Last month, Standard Investment Bank Ltd. raised its recommendation on Total Kenya to buy from sell and more than doubled the target price to 37.68 shillings from 15.30 shillings. Total Kenya’s shares have gained 18 percent this year, outpacing KenolKobil, whose stock has dropped 37 percent as Kenya’s worst performer.
Genghis also rated KenolKobil as buy in new coverage with a price target of 10.91 shillings. The stock rose 1.8 percent today to 8.60 shillings after reporting first-half profit of 147.4 million shillings ($1.69 million) from a loss of 3.9 billion shillings.
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