NAIROBI, Kenya – The Nairobi Securities Exchange (NSE) is witnessing a remarkable surge in state-backed shares, with Kenya Airways, Kenya Power, and East Africa Portland Cement (EAPC) seeing their prices more than double in recent days.
This trend has sparked debate among market analysts and investors about whether the rise reflects genuine growth or speculative excitement.
Kenya Airways (KQ) has been a standout performer, with its share price surging 9.8 percent on Thursday alone.
Since resuming trading on January 6 after a five-year hiatus, KQ shares have been on a steady upward trajectory, hitting Sh5.22 yesterday, a significant recovery from Sh3.83 in July 2020.
The airline’s return to profitability in the first half of 2024, posting a net profit of Sh513 million, has bolstered investor confidence.
Gilbert Mukeshi, a stock market analyst, attributes KQ’s rebound to a solid recovery plan and anticipates the share could reach Sh8 by the end of the first quarter.
However, he warns of potential limitations due to the airline’s negative book valuation and liquidity issues.
“For investors and stakeholders, the return to the NSE offers a renewed opportunity to participate in the future of one of Africa’s most iconic carriers. The question now is whether KQ can sustain its momentum and fully capitalize on its recent gains to secure long-term stability,” Mukeshi commented.
East Africa Portland Cement is also enjoying a resurgence, having declared its first dividend in 11 years following a net profit of Sh1 billion for the year ending June 2024.
The company’s share price climbed from Sh8 in January to Sh32.85 by December 23, peaking at Sh55 during the year.
Despite recent leadership disputes causing a slight drop to Sh29, analysts remain optimistic about the company’s future performance.
Kenya Power, another state-linked firm, closed at Sh7.40 on Thursday, more than doubling its share price from Sh3.47 in October.
The company reported a profit of Sh319 million for the half-year to December 2023, marking a significant recovery from a Sh1.1 billion loss in the same period the previous year.
The surge in these state-backed stocks has led to a broader conversation about the future of government-linked entities on the NSE.
