Nairobi Securities Exchange listed stock:
Shares in Uchumi Supermarket Ltd (UCHM) rose to a high of Sh4 on Tuesday on a day characterized by heavy volume trading. The shares settled at Sh3.95 by closing bell, up 5.33% over the previous day’s closing price. Some 82,100 shares of Uchumi changed hands, significantly above the stock’s daily average volume of 60,230. But what exactly caused the spike in the stock of the supermarket operator?
Without a press release from the company announcing a fresh development coming out on Tuesday or the day before, Uchumi’s gains can be explained by recent events.
Without a press release from the company announcing a fresh development coming out on Tuesday or the day before, Uchumi’s gains can be explained by recent events.
Uchumi’s rivals are fighting
The sibling fight for the control of Naivas Supermarkets escalated last week. Kagiri Mukuha, one of the three brothers who own Naivas made fresh claims that his brothers had cheated him out of the business by selling the supermarket chain secretly. Savvy investors seemed to have noted that the fight inside Naivas, one of Uchumi Supermarket Ltd (UCHM)’s main rivals, bodes well for Uchumi recovery. The speculation is that shoppers will ditch Naivas when they realize that spending their money at Naivas is fueling the fight among the owners of the business. Uchumi may end up receiving shoppers defecting from Naivas.
It should not be forgotten that as part of its management shakeup that saw the sacking of Jonathan Ciano as CEO, Uchumi Supermarket Ltd (UCHM) hired an executive from Naivas. Willy Kimani was tapped for the chief operating officer (COO) at Uchumi. He was Navas’ business development and marketing.
The sibling fight for the control of Naivas Supermarkets escalated last week. Kagiri Mukuha, one of the three brothers who own Naivas made fresh claims that his brothers had cheated him out of the business by selling the supermarket chain secretly. Savvy investors seemed to have noted that the fight inside Naivas, one of Uchumi Supermarket Ltd (UCHM)’s main rivals, bodes well for Uchumi recovery. The speculation is that shoppers will ditch Naivas when they realize that spending their money at Naivas is fueling the fight among the owners of the business. Uchumi may end up receiving shoppers defecting from Naivas.
It should not be forgotten that as part of its management shakeup that saw the sacking of Jonathan Ciano as CEO, Uchumi Supermarket Ltd (UCHM) hired an executive from Naivas. Willy Kimani was tapped for the chief operating officer (COO) at Uchumi. He was Navas’ business development and marketing.
Strategic investor
Uchumi Supermarket Ltd (UCHM) is in the process of seeking a strategic investor who will inject more billions into the business and pave its way to recovery. The strategic investor, which Uchumi is assessing from a pool of 36 potential candidates, would invest about Sh3.2 billion in the retailer. The market appears to be betting that Uchumi will get a strategic investor on favorable terms to help jumpstart the business.
Investors also appear to be comfortable with Uchumi Supermarket Ltd (UCHM)’s Sh1.8 billion debt-to-equity swap deal that it is pursuing with some of its suppliers.
Uchumi Supermarket Ltd (UCHM) is in the process of seeking a strategic investor who will inject more billions into the business and pave its way to recovery. The strategic investor, which Uchumi is assessing from a pool of 36 potential candidates, would invest about Sh3.2 billion in the retailer. The market appears to be betting that Uchumi will get a strategic investor on favorable terms to help jumpstart the business.
Investors also appear to be comfortable with Uchumi Supermarket Ltd (UCHM)’s Sh1.8 billion debt-to-equity swap deal that it is pursuing with some of its suppliers.
Nairobi Securities Exchange listed stock:
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