Uchumi Supermarkets Ltd., Kenya’s only publicly traded grocer, gained for a seventh day and reached its strongest level in more than six years as the company expanded and the value of retail trade increased.
The stock advanced 4.1 percent to 18 shillings by 12:23 p.m. in Nairobi, the capital. A close at that level would be the highest since March 2, 2006, according to data compiled by Bloomberg.
“Uchumi is expanding in the region and when you look at the supermarket business, they have the best margin,” Rufus Mwanyasi, head trader at Nairobi-based Canaan Capital Ltd. said in a phone interview today. “The middle class is also growing so investors are looking for consumer stocks.”
In the year to December 2011, the value of wholesale and retail trade in Kenya grew to 321 billion shillings ($3.80 billion) from 261 billion shillings, according to the latest economy survey released by the Ministry of Planning on May 15.
Year to date the stock has surged 134 percent, the best performing Kenyan stock, according to data compiled by Bloomberg. Uchumi, which opened its first store in Dar es Salaam, Tanzania’s commercial capital, in August and a second one in Uganda, plans to open another seven outlets in the region, three in Uganda and four in Kenya, Managing Director Jonathan Ciano said in September.
The company’s pretax profit for the six months through December climbed 26 percent to 204.3 million shillings, Uchumi said in January. Nairobi-based Kestrel Capital (East Africa) Ltd. recommended investors buy the stock in March, initiating coverage with a price estimate of 15 shillings and saying the board of directors would probably discuss the company’s dividend policy at the end of the financial year in June.
Uchumi resumed trading in Nairobi in May 2011, following a five-year suspension, after most of its debts were cleared and others were converted into shares.