The year-to-date loss in Britam Holdings‘ shares, a Kenya-based financial services holding run by Charles Kimani Njuguna, has resulted in a $17.5-million drop in the firm’s market value, as hesitant investors cycle out cash from the diverse investment group despite an exceptional half-year result.
This prevailing market action resulted in a million-dollar drop in the stake of Mbaru, a leading Kenyan multimillionaire businessman who owns a sizeable position in the diversified investment group.
Mbaru, a seasoned investment banker and the chairman of Dyer and Blair Investment Bank, owns a significant 7.72-percent stake in Britam Holdings, amounting to 194,800,100 ordinary shares. The market value of his stake has dropped by more than $1.35 million since the start of the year, as wary investors sold off stakes in the Kenyan investment group.
The drop in the value of his stake can be directly attributed to a 10.67-percent drop in the share price of Britam Holdings, from Ksh7.5 ($0.0652) per share at the start of trading this year to Ksh6.7 ($0.4595) at the time of writing this report.
As a result of the group’s share price movement on the Nairobi Stock Exchange, the market value of Mbaru’s 7.72-percent stake in Britam Holdings has decreased by Ksh155.84 million ($1.354 million) from Ksh1.46 billion ($12.69 million) at the opening of business this year to Ksh1.31 billion ($11.34 billion) at the time of writing.
Despite the impact of the loss on the value of his stake and his net worth, Mbaru remains one of the Nairobi Stock Exchange’s wealthiest investors and one of Kenya’s wealthiest businessmen.
Britam was able to exit its loss position in the first six months of 2021 as a result of a combination of cost- and revenue-optimization strategies implemented by management, combined with its new business structure.
According to its half-year earnings report, it made a profit of Ksh376.3 million ($3.31 million) in the first half of 2021, up from a loss of KSh1.63 billion ($14.36 million) in the first half of 2020.
The Kenya-based financial services group is on track to earn Ksh13.95 billion ($123.3 million) from the International Finance Corporation’s purchase of a significant stake in Kenya’s largest financial services group, Equity Group Holdings.
Experts believe that the 11-percent premium on the deal with IFC will increase Britam’s profits by about Ksh1.5 billion ($13.3 million) at the end of its fiscal year in 2021.
