Uchumi Hits 4-Month High on Profit Speculation: Nairobi Mover
Uchumi Supermarkets Ltd., (UCSP) Kenya’s best-performing stock this year, jumped to its highest level in four months on speculation the company may this month announce full-year profit increased at least 20 percent.
Shares in Kenya’s only publicly traded retail chain gained as much as 3.1 percent to 18.50 shillings and were trading 1.4 percent higher at 18.20 shillings by 12:50 p.m. in the capital, Nairobi. A close at this level will be the highest since May 24.
“Guys are anticipating top-line growth of 30 percent and profit after tax of at least 20 percent,” Moses Waireri, a research analyst at Nairobi-based Genghis Capital Ltd., said in a phone interview.
Pretax profit for the six months through December climbed 26 percent to 204.3 million shillings ($2.40 million) while sales grew 29 percent to 7.5 billion shillings, Uchumi said in January. The company is expected to announce earnings for the 12 months through to June toward the end of the month.
Earnings will be boosted by increased consumer spending as inflation slows, Eric Munywoki, a research analyst at Nairobi- based Old Mutual Securities Ltd., said.
Kenyan inflation slowed for the 10th consecutive month in September, with the rate dropping to 5.3 percent from 6.1 percent the previous month. The measure had risen to a high of 19.7 percent in November 2011.
Uchumi’s stock has more than doubled this year, compared with a 28 percent gain for the NSE All-Share Index. (NSEASI)
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