Local investors have snapped up Sh4.47 billion KCB Group shares or an additional 3.9 percent stake in the six months to September as foreign investors sold out in the wake of Covid-19 pandemic disruptions.
Latest KCB shareholder profile for September shows that locals took up an additional 124.899 million shares in Kenya’s top lender, rising their stake to all-time high of 2.089 billion shares or 65.04 percent.
This is compared with the 1.964 billion shares or 61.15 percent of total shares that were in the hands of locals at the end of March.
Foreigners stake in KCB is now at an all-time low of 15.02 percent, coming in the period in which Nairobi bourse foreign investors sell-offs hit Sh23.84 billion.
A total of 40 new institutional investors and 1,416 individual shareholders went for KCB shares during this period even as the existing ones ramped up their stakes.
Foreigners were ditching the high risk equities for low-risk investments to avoid erosion of their wealth, giving room for locals to deepen their shareholding in an environment of falling prices.
The value of the additional shares in the hands of locals rose by Sh4.46 billion to Sh74.73 billion when calculated using the KCB six-month average share price of Sh35.76.
Between mid-March and September—the period which coincides with onset and spreading of Covid-19 cases in Kenya—foreign shareholder stake has dropped from 19.02 per cent.
The latest profile means that foreigners now hold the smallest stake in KCB with local institutional investors commanding 38.49 percent followed by local individuals (26.55 per cent) and National Treasury (19.76 percent).
The current structure differs sharply with that of end of 2017 when foreigners were the top shareholders in KCB with a stake of 29.25 percent.
Collectively, foreigners have now sold 496.1 million shares in KCB between December 2017 and last September, helping local and institutional investors to tighten grip on KCB.
Fundamentals of firms such as banks have come under pressure in Covid-19 especially with drops in profits on higher provisioning for loan defaults dimming the dividend outlook.
The Central Bank of Kenya in a mid-August circular told banks to pay more attention on their capital before making any proposal for dividend payouts.
Banks have between March and August restructured loans worth Sh1.12 trillion or 38 per cent of the total loan book due to the coronavirus-induced economic hardships that have hurt borrowers’ ability to repay.
Borrowers have defaulted a record Sh45 billion in the six months to August sending non-performing loans ratio to 13.6 percent—the highest since August 2007 when it stood at 14.41 percent.
KCB group half year net earnings to June tumbled by 40 percent to Sh7.5 billion while that of Equity Group dropped by 24.3 percent to Sh9.02 billion.
Stanbic bank saw a 37.2 percent drop to Sh2.55 billion while that of Cooperative Bank of Kenya fell 3.6 per cent to Sh7.3 billion.
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