Feb. 20 (Bloomberg) -- Mumias Sugar Co., Kenya’s biggest producer of the sweetener, gained for a second day and headed for its highest close in a week on speculation the stock was oversold.
Mumias gained 4.4 percent to 4.75 shillings by 2:03 p.m. in Nairobi, the capital. A close at this level would be the highest since Feb. 13. The shares are still down 11 percent this year.
“The stock is oversold because the earnings we saw did not warrant a such a decline,” Francis Mwangi, head of research at Nairobi-based Standard Investment Bank Ltd., said in a phone interview today. “We have a value of 8.3 shillings so to us it is attractive at the current levels.”
The valuation is based on sugar distribution costs having fallen and the average price of sugar in the six months to Dec. 31 rising to 106,000 shillings ($1,276) per ton from 69,000 shillings, Mwangi said.
Mumias posted profit for the six months through December of 881.3 million shillings, compared with 829.6 million shillings a year earlier, it said Feb. 3. Revenue declined to 6.92 billion shillings from 7.32 billion shillings.
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