Oct. 9 (Bloomberg) -- Williamson Tea Kenya Ltd., a producer of the leaves, surged the most in eight months on bets higher prices will boost the company’s profit this fiscal year.
Williamson’s stock rallied by the daily limit of 10 percent to 220 shillings as of 2:46 p.m. in the capital, Nairobi, with the volume of shares traded at 12 times the three-month moving average. A close at that level would mark the largest gain since Feb. 10.
“They have posted profits for three consecutive years and tea prices have been in a sweet spot for a long time so they will do better since there is a lot of cash on the balance sheet,” Aly Khan Satchu, chief executive officer of Nairobi-based investment company Rich Management Ltd., said in a phone interview today.
Kenya, the world’s biggest exporter of black tea, said Oct. 1 the average tea price through August rose 4 percent to $3.15 a kilogram (2.2 pounds) from a year earlier. Tea-export earnings in East Africa’s largest economy are forecast to increase to 110 billion shillings this year from 109 billion shillings in 2011 on better prices, even as output slides, according to the Tea Board of Kenya.
Williamson in June posted a 21 percent increase in revenue to 3.28 billion shillings for the 12 months through March, boosting profit 1 percent to 884.4 million shillings.
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