Carbacid Gains to 2-Month High on Soda Outlook: Nairobi Mover

Carbacid Investments Ltd., a Kenyan carbon-dioxide maker, gained for the first time in six days as rising output and consumption of soft drinks in East Africa’s drives expectations for higher earnings.

The shares climbed 5 shillings, or 3.6 percent, to 145 shillings by the close in Nairobi, the highest since May 20. More than 24 times the three-month daily average volume of shares were traded.

In the first quarter of 2013, Kenya’s soft-drink production rose 6.6 percent to 109.7 million liters, according to the country’s statistics agency. The economy is forecast to expand 6 percent this year, the fastest pace in six years, compared with 4.6 percent in 2012.

“Investors are anticipating strong full year earnings because the soft drinks sector is growing strongly,” Aly-Khan Satchu, chief executive officer of Rich Management Ltd., a Nairobi-based adviser to companies and high net-worth individuals, said by phone. “Soft drinks are highly correlated to the economy so as the economy grows faster and the middle class expands we have more people consuming soft drinks,” Satchu said.

The company is “already trading at a discount to the market,” he said. Carbacid has a price-to-earnings ratio of 12.7, compared with 14.3 for the Nairobi Securities Exchange All Share Index. Net income in the first half through January rose 51 percent to 264.2 million shillings ($3 million) , it said in March. Sales jumped 15 percent to 546.7 million shillings.

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