TWO Kenyan firms, Kenya Airways and Uchumi Supermarket are risking to be delisted from the East African Stock markets due to poor balance sheets.
On Monday, Kenya Airways counter at the Nairobi Securities Exchange (NSE) recorded a price of 4.50 Kenya shilling, representing 5.26 per cent fall while Uchumi Supermarket registered price appreciation by 0.62 per cent to 8.10 Kenya shilling.
The two companies, also cross-listed on to the Dar es Salaam Stock Exchange (DSE), have recorded diverse share price movement with Kenya Airways remaining unchanged for a couple of weeks at 100/- while Uchumi Supermarket appreciating to 180/-per share, representing 5.88 per cent rise.
Kenya Airways posses 66,157,350 paid up shares (41.23 per cent) at the cash strapped Precision Air Services which is grappling with financial constraints due to mounting debts and failure to raise capital in its recent initial public offer.
In October, Uchumi Supermarkets closed its operations in Tanzania and Uganda due to poor financial statement where it has been incurring loses in all its regional undertakings. Over 400 employees and suppliers have filed a suit in the arbitration court demanding contractual and legal rights as well as compensations.
Orbit Securities Limited General Manager, Mr Simon Juventus said in Dar es Salaam yesterday that the two companies’ adverse balance sheets are bad news that will hurt their share trading at the equity markets.
“Any good or bad news may result into investors’ panic that can lead to increased supply and price decline,” he said, adding that there is hope for the Kenyan government interventions particularly in the Kenya Airways where it owns majority shareholder.
The Kenya Capital Markets Authority is on the spot because the capital markets law empowers it as the regulator to take action against listed firms with slim chances of recovery from losses, insolvency and negative working capital to protect investors, financiers, suppliers and employees.
