The disclosure of Kiharu MP Ndindi Nyoro’s tripling of his shareholding in power utility Kenya Power as well as the anticipated policies of the incoming administration of President-elect William Ruto are driving a surge in demand for Kenya Power stocks at the Nairobi Securities Exchange (NSE).
Kenya Power was the biggest gainer at the bourse on Monday, September 12. As of 3.25pm, the stock was up 10 percent.
Nyoro, a close and vocal ally of the President, acquired additional shares between June 2021 and June 2022, tripling his shareholding from 9,116,800 shares in June 2021 to 27,291,400 shares a year later – as disclosed in Capital Markets Authority (CMA) filings.
With its 50.1% stake (978,492,034 shares by the end of June 2022), the Government retains control of Kenya Power. Nyoro is the largest individual shareholder and the third-largest shareholder overall behind the bank-owned stake in second place (Standard Chartered Residual nominees own the equivalent of 32,518,589 shares).
Nyoro, who is also a partner in stock-broking firm Investax Capital, stated that he bought the stock as he believes it is undervalued. He disclosed that he has been purchasing the stock over the four years.
“The company is valued at less than 1 per cent of its asset value. I am buying KPLC shares because I know we can fix issues of electricity when allowed to make decisions. It has a lot of sleeping capital which can be used to assist more homes,” he initially stated.
On September 12, Nyoro offered more insight into his analysis of the stock.
“There are reasons why the market has undervalued Kenya Power including the high debt portfolio, huge unpaid bills, especially from GoK and inefficiencies stemming from being ‘government-run'”
“Most investors, us included, are holding for long term with the hope that the sleeping giant can roar with a few streamlining measures,” he wrote online.
In his campaigns, Ruto had stated that his administration would move to have Kenya Power operate as a commercial entity, vowing to reducing government linkages with the power utility.
Asserting that he was sharing his thoughts and not investment advice, Nyoro stated that he saw opportunities at the NSE despite its long-running bear run.
“Our investment strategy is guided by Warren Buffers Mantra -Be greedy when others are fearful and fearful when others are greedy.”
“NSE was among the worst performing markets in the world last year – we see opportunities here. From our banks and telcos expanding regionally. All these are opportunities,” he shared.
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