Mumias of Kenya Advances to Seven-Week High on Sugar-Import CapEric Ombok
Mumias Sugar Co., Kenya’s biggest processor of the sweetener, rose to a seven-week high after an African trading block supported the nation’s bid to extend a cap on the quantity of duty-free imports of the commodity.
Shares in Kenya’s only publicly traded sugar company jumped for a second day, climbing 9.2 percent to 3.55 shillings by 1:55 p.m. in Nairobi, the highest since Jan. 7. More than 5 million shares were traded, or almost four times the three-month daily average volume.
The Common Market for Eastern and Southern African states, a 19-nation trading group, placed a quota on the amount of sugar that can be imported free of duty into member countries. The council of ministers yesterday supported Kenya’s bid for a one-year extension of the cap, which took effect in 2008 and was scheduled to end tomorrow. The decision is subject to approval by Comesa’s heads of states who meet today in Democratic Republic of Congo’s capital, Kinshasa.
“The removal would have a negative impact on Mumias and the industry as a whole,” Maureen Kirigua, a research analyst at Nairobi-based Sterling Capital, said by phone today.
Mumias’ shares have climbed 9.2 percent in 2014, compared with a 1.3 percent gain in the FTSE NSE Kenya 25 Index.
Mumias’ 14-day relative-strength index rose to 74, according to data compiled by Bloomberg. A level above 70 signals to some technical analysts the stock has risen too much and too fast. The RSI, a technical indicator, measures the velocity of a security’s price movement to determine overbought and oversold conditions.