East Africa Portland Cement investors' wealth at the Nairobi Securities Exchange has grown threefold since December largely on market speculation.
NSE market data shows the cement maker's share price has shot from Sh8 at the end of 2023 to Sh21.85 on Thursday, a staggering 224.3 per cent year-to-date growth, making it the best-performing stock.
The firm, which has not issued a dividend in a decade has been the 36th most traded stock on the NSE over the past three months, trading a total volume of 412,300 shares—in 304 deals—valued at Sh3.23 million, with an average of 6,544 traded shares per session.
It hit a volume high of 69,900 on July 8, two months after resuming full production at its Athi River-based factory after completing a Sh400 million upgrade in a plan set to increase its production capacity in the next two years.
Analysts have attributed the spiralling of the firm's share price to market speculation following its commitment to increase cement production to 83,000 tonnes per month as per the company's five-year strategic plan.
A fortnight ago, the company's Acting MD Mohamed Osman revealed that the business had for the first time gone past the break-even point easing the operational challenges and unlocking hope of meeting stakeholders’ expectations.
He said that the firm is working towards raising capital for continued factory modernisation, including the installation of a second clinker line - all without incurring additional debt.
The firm also announced plans to sell part of its idle assets to issue the first dividend in a decade.
Stock market analyst George Mutemi says investors are trading on hope, a move that has seen share prices of EAPC, Bamburi Cement and Kenya Power rise by over 100 per cent in the past nine months.
"Stocks are about investing in the future hence firms with positive future sentiments are sure buys. News of dividend payout for EAPC, bids for Bamburi Cement buyout and the return to profitability by Kenya Power is currently guiding the market,'' Mutemi said.
Kenya Power's share closed the market at Sh3.47 on Thursday, having gained 147 per cent from Sh1.47 last December.
The listed power producer recorded Sh319 million in profit after tax for the half-year period to December 2023, amid an increase in electricity sales.
This was a comeback from a Sh1.1 billion loss recorded during the previous half-year period to December 2022, with the company's past years being tough ones.
Bamburi Cement's share price at the NSE on other hand has risen by 129.4 per cent, largely on a bid and a counter bid from Tanzania's Amsons Group and Savannah Clinker late last month.
Yesterday, the cement firm's share closed at Sh58.50, gaining a marginal 0.4 per cent.
This was, however, almost Sh20 lower compared to a high of Sh77.50 two weeks ago when Savannah Clinker Limited offered a Sh5 haircut to counter Sh65 per share offer by the Tanzanian counterpart.
As the three firms wake up from a long-time slumber that saw their share prices deteriorate in the past decade, companies that have been performing well have reported major dips.
British American Tobacco (BAT) share for instance has dropped 16 per cent since January. Although it gained 1.1 per cent on Thursday to trade at Sh349.75, the price is a shadow of its performance in 2016 when it hit a high of Sh630.
Others are Jubilee Holdings, TransCentury and NSE, which have shed 7.3 and 13.7 per cent respectively.
