It’s nearly a week since power generator KENGEN started trading on the Nairobi Stock Exchange (NSE).
The initial public offer price was Ksh11.90 it closed day on at sh40 a share for a 236% appreciation before closing the week at Ksh39.25.
The share offer was oversubscribed more than four times over, which gave capital markets authorities a headache when it came to allocation.
Looking to ensure as wide participation as possible the authorities decided to put a ceiling on number of shares that any one individual — human or corporate, would get. The final figure — 6600, had institutional investors spluttering into their drinks.
So the government left more than Ksh15b on the table and is in the process of refunding it.
Brokers are now advising specualtors and traders to cash in and one can expect that the share will lose some more ground before it stabilises — a 40+ PE is a bit hard to sustain!!
KENGEN is pulling out of a difficult time and beginning to grow earnings being a long term player here would not altogether be a bad idea!