East African Portland Cement (EAPC) has reported a major boost at the Nairobi Securities Exchange (NSE), with its share price soaring by nearly six per cent in the week ending October 9 to hit a high of Ksh 59.75. The jump placed the cement maker among the week’s top gainers alongside Flame Tree and Crown Paints.
The strong market performance comes despite an ongoing storm over a planned takeover by a Tanzanian cement tycoon, whose company is seeking to acquire a 29.2 per cent stake in EAPC, a firm largely owned by the Kenyan government.
In late August, the Capital Markets Authority (CMA) approved the proposed sale of Holcim Limited’s 29.2 per cent stake in EAPC Plc to Kalahari Cement Limited, a newly registered Kenyan investment vehicle linked to Tanzania’s Amsons Group.
The sale price was agreed at Ksh 27.30 per share, valuing the transaction at Sh718.7 million ($5.57 million). However, this figure represents a deep discount compared to EAPC’s current market valuation, with shares now trading above Sh50 amid speculation surrounding the takeover.
The steep undervaluation has triggered public outcry and sharp reactions from Members of Parliament, who have accused CMA of approving a questionable deal. Lawmakers have questioned the rationale behind authorising such a low-price sale without seeking the opinion of the Attorney General or subjecting the process to public participation.
Concerns have also been raised over the potential creation of a monopoly in the cement industry, given that the same Tanzanian investors recently acquired Bamburi Cement, another dominant player in the market.
Despite the drama, the Nairobi bourse overall recorded subdued activity during the week. The NASI, NSE 25, and NSE 20 share indices declined by 3.57 per cent, 1.86 per cent and 2.07 per cent, respectively. Market capitalisation dropped by 3.57 per cent, although total shares traded and equity turnover increased by 4.25 per cent and an impressive 209.94 per cent, respectively.
Bond turnover in the domestic secondary market fell sharply by 37.8 per cent.
On the global front, yields on Kenya’s Eurobonds rose by an average of 13.10 basis points as the country moved forward with plans to buy back part of its 2028 issue.
Kenya is also engaging the International Monetary Fund (IMF) in a fresh funded programme. Central Bank of Kenya Governor Kamau Thugge confirmed that a Kenyan delegation will travel to Washington, D.C. this week for negotiations after weeks of talks with an IMF team that has been in Nairobi since early September.
Meanwhile, investors are returning to short-term government securities after two weeks of lukewarm interest. The Treasury bill auction for October 9 received bids worth Ksh 25.6 billion against an advertised Ksh 24 billion, marking a performance rate of 106.9 per cent.
However, interest rates on the 91-day, 182-day and 364-day Treasury bills declined after the Central Bank of Kenya trimmed its base lending rate by 25 basis points to 9.25 per cent, signalling a cautious shift in monetary policy.
