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Agriculture counters defy eight-month Covid-19 shocks at bourse

By John Otini
Tuesday, November 10th, 2020
Nairobi Securities Exchange. Photo/PD/FILE
In summary

Agriculture counters on the Nairobi Securities Exchange (NSE) defied the Covid-19 pandemic to deliver robust performance for shareholders.

Eaagads, Kakuzi, Sasini braved the last eight months of lockdowns to build shareholder value. However, low liquidity on some counters, was key to their great performance.

Eaagads is up 31 per cent year-to-date while Kakuzi is up 8 per cent and Sasini is also up 6 per cent.

With most stocks except ICT and agriculture suffering deterioration of shareholder value, increased demand for coffee and high prices during the pandemic helped Eaagads stock.

“If you look at the chart, you see that the key word is agriculture,” senior investment analyst at Standard Bank Kasiva Mutisya said. 

Kakuzi which exports tea, avocados, pineapples, and livestock saw a good run until news emerged in the UK accusing it of employee harassment.

Tea and coffee exporters

Sasini is a major exporter of tea and coffee and has been one of the few companies on the NSE to defy selling pressure from investors.

The companies have also been shielded from foreign investor selloffs because they are mainly traded by local investors.

Foreigners love liquid counters where they enter and exit fast. The most liquid counters are Safaricom, Equity, EABL and KCB. 

Eaagads was helped by its low market capitalisation of Sh426 million which means the stock price is easily influenced by minimal trading activities and it is very difficult for investors to exit.

Eaagads share price settled at Sh13.2 last week Friday. Kakuzi’s market capitalisation hit Sh7.2 billion offering sufficient depth for investors to exit. Kakuzi stock was last trading at Sh360.

Sasini market capitalisation stands at Sh4 billion and was on Friday trading at Sh18.

However, Eagads posted a loss of Sh18 million for the full-year ending March 2020.

Kakuzi earnings for the first half of the year grew by 11 per cent on lower taxes as profit after tax grew to Sh272.8 million up from Sh245.6 million for H1 2019, following the government’s directive to cut corporate tax by 5 per cent. 

Sasini recorded a loss after tax of Sh337 million compared to an after-tax profit of 293.5 million in the previous year.

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