Investors at the Nairobi Securities Exchange (NSE) were bullish on Kenyan tea firms on Friday, pushing shares of Limuru Tea, Kakuzi, Kapchorua, and Eaagads to the top of the gainers list.
Market watchers attribute the surge to anticipation over the upcoming Kenya Tea Development Agency (KTDA) board meeting, set for September 22–26, where annual bonuses for smallholder farmers will be announced.
Limuru Tea led the rally, rising 9.9 per cent to Ksh 340.75, followed by Kakuzi at Ksh 424.75 after a 7.4 per cent gain. Eaagads and Kapchorua Tea added 4.9 per cent each to close at Ksh 20 and Ksh 327, respectively.
Analysts say investors are betting that strong performance at the Mombasa Tea Auction and continued global demand for Kenyan tea will translate into higher earnings for these companies.
The bonus announcement is not only important for investors but also critical for over 600,000 smallholder tea farmers whose livelihoods depend on it. Last year, farmers received Ksh 89.2 billion in payouts, but this year’s bonuses are expected to be smaller after factories processed 558.4 million kilos of green leaf, down from 619.9 million kilos previously.
Farmers in Murang’a, Nyeri, and other tea-growing counties have already voiced concerns over lower auction prices at the Mombasa Tea Auction. KTDA has urged growers to ignore unofficial figures circulating online and confirmed that final payments will only be communicated once all factories declare their results.
Outside the tea sector, financial institutions and real estate companies posted sharp losses, weighed down by monetary policy adjustments and regulatory pressures.
Home Afrika fell 9.7 per cent, CIC Insurance dropped 8.2 per cent, and Absa Bank shed 6.6 per cent. Sanlam also retreated nearly four per cent as shareholders prepare to vote on a rebrand to Sanlam Allianz Holdings (Kenya) Plc in October following Jubilee Holdings’ exit from general insurance in East Africa.
The overall market remained subdued, with key indices recording losses: NASI fell 2.13 per cent, NSE 25 declined 1.86 per cent, and NSE 20 dropped 2.76 per cent. Market capitalisation slipped by 2.1 per cent, while shares traded dropped 38.3 per cent. Treasury bill auctions saw strong uptake at 95.7 per cent of the target, while long-term bonds were oversubscribed, receiving Ksh 97.3 billion against an offer of Ksh 40 billion.
Kenya’s tea sector remains a major pillar of the economy and the country’s largest foreign exchange earner. Exports reached a record 594.5 million kilograms in 2024, generating Ksh 215.2 billion in revenue.
Despite global demand, challenges persist, including rising production costs, fluctuating auction prices, and erratic weather.
The upcoming KTDA bonus announcement is expected to provide clarity on farmers’ earnings and corporate performance, offering insight into both the sector’s economic health and potential market movements at the NSE.
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