Mumias Sugar Co., Kenya’s biggest producer of the sweetener, headed for the largest decline in almost six months as investors took profit from an overbought level.
The shares dropped 9.5 percent to 5.7 shillings at 11:35 a.m. in Nairobi, the steepest fall since Nov. 7. The stock’s 14-day relative strength index closed at 93.4 yesterday, according to data ccompiled by Bloomberg. A reading above 70 means a security is overvalued and will probably fall. Mumias’ RSI has been above 70 since April 17.
“Looking at the volumes, we have not seen foreign investors and local fund managers. So its more of profit taking by retail investors,” Francis Mwangi, head of research at Nairobi-based Standard Investment Bank Ltd., said in a phone interview today.
The shares have rallied 31 percent between yesterday and April 16, when the company appointed a new chief executive officer. The Nairobi Securities Exchange Ltd. All Share Index climbed 3 percent rise in the same period.
Peter Kebati, who joined Mumias in April 2003, will take over as chief executive from Evans Kidero on July 1, the company said on its website in a statement dated April 16. Kidero will depart from the company at the end of its financial year in June, according to the statement. He is leaving to join politics, the Daily Nation newspaper reported April 15.