Dec. 17 (Bloomberg) -- Uchumi Supermarkets Ltd., Kenya’s only publicly traded retailer, rose to its highest level in more than two weeks after shareholders approved plans to raise additional capital to fund its expansion.
Uchumi climbed 1 percent to 19.45 shillings by the 3 p.m. close in Nairobi, the capital, the highest level since Nov. 30. The number of shares traded was 181 percent of the stock’s three-month average volume, according to data compiled by Bloomberg.
Holders of Kenya’s best performing stock this year approved a 1.5 billion-shilling ($17 million) rights offer and the cross-listing of its stock in Rwanda, Uganda and Tanzania. Uchumi plans to issue 200 million shares, increasing its capital to 3 billion shillings from 2 billion shillings, Chief Executive Officer Jonathan Ciano said on Dec. 11.
“There is definitely some position taking ahead of the rights issue,” Alistair Gould, the Nairobi-based unit head of trading at Old Mutual Securities Ltd., said by phone today. “There are a lot of people looking to get some exposure into the African retail sector and Uchumi is the only one which is listed.”
Shareholders also approved plans to trade on the Uganda Securities Exchange, the Dar es Salaam Stock Exchange and Rwanda’s over-the-counter market, Ciano said.
Uchumi opened three outlets in Uganda and one each in Tanzania and Kenya during the fiscal year to June 30, increasing its branches to 24, according to the company’s website. The company is now considering expansion into Rwanda and Southern Sudan, Ciano said Dec. 11.
Uchumi’s valuation is lower relative to some of its regional peers at a price-to-earnings ratio of 18.9, according to data compiled by Bloomberg. Massmart Holdings Ltd., a South African retailer controlled by Wal-Mart Stores Inc., trades at 33.7 times projected earnings and Pick n Pay Stores Ltd., a Cape Town-based supermarket chain, is valued at 32.2 times profit.
The Kenyan company has more than doubled this year, compared with a 37 percent jump by the Nairobi Securities Exchange All-Share Index.
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