Kenya Electricity Generating Co., the East African nation’s biggest power producer, gained for a fifth day, marking its longest winning streak in more than three months, as plans to boost output attract foreign investors.
Shares in the Kenyan bourse’s second-best performer this year advanced 2.8 percent to 16.75 shillings by the close in Nairobi, the longest stretch of increases since April 2 and the highest level since June 13. More than 1.1 million shares were traded, or 2.5 times the three-month daily average.
The country has power capacity of 1,600 megawatts against a peak demand of 1,500 megawatts, which is growing at an average rate of 8 percent a year, according to KenGen, as the company is known. It produces 1,232 megawatts, while four private producers generate the remainder.
“KenGen is enhancing capacity to 3,000 megawatts by 2018 and will produce power at a lower cost,” Halima Saadia, a research analyst at Old Mutual Securities Ltd., said by phone. “The demand is there and by producing more energy at a cheaper cost the company will benefit.”
Old Mutual has a price target of 22.25 shillings on KenGen. The company was rated a strong buy in new coverage at the Nairobi-based brokerage on July 8. KenGen’s price-to-earnings ratio is 13.2.
“It’s foreign investors who are moving the stock,” Saadia said. Shares in the company rallied 90 percent this year, compared with a 28 percent gain on the FTSE NSE 25 Share Index.