Where stock investors are making money since the pandemic
By Nairobi Stocks Review
It has been a year since the coronavirus outbreak struck Kenya. Many will remember it for destroying their financial lives. But there are places people continued to make money as if nothing had happened. The stock market is one. Anyone can make money in the stock market with the right companies. You are about to find out the best companies to invest in Kenya during the pandemic.
When the pandemic struck, many investors rushed to sell their shares fearing for the worst. With more people selling and few buying, many stocks tumbled to record lows. As the stock market crash unfolded, some investors chose to stay put. Others took advantage of the low prices to purchase more shares in high-quality companies on the cheap.
Investors who stayed calm through the stock market storm and those who seized the opportunity to snap up cheap shares have every reason to smile. Here is where investors at the Nairobi Securities Exchange made money during the pandemic.
The best companies to invest in Kenya during the pandemic
Investors make money when the stocks they hold increase in value. Here are the companies whose share prices rose the most in the past year, consequently making good profit for investors in the pandemic.
- Safaricom (SCOM)
- Carbacid (CARB)
- Kapchorua Tea (KAPC)
- Williamson Tea (WTK)
- BAT Kenya (BAT)
- TPS Eastern Africa (TPSE)
- Kenya-Re (KNRE)
Safaricom share price rose 62% in the past year. The company is in telecom business and operates the largest wireless network in Kenya. It also offers mobile money services through the ubiquitous Mpesa platform. Safaricom is a profitable company and has consistently paid dividends since going public.
Shares of gas producer Carbacid (CARB) also performed well, tying with Safaricom at 62% gain in the pandemic year. In its latest financial year, Carbacid reported a profit of Ksh324 million on revenue of Ksh682 million. Carbacid is in the process of acquiring its rival BOC Kenya to expand its business in a deal valued at Ksh1.2 billion.
Kapchorua Tea share price popped up 52.4% in the past year. The company is in tea farming and processing business. Its biggest shareholder is Williamson Tea. In its latest financial year, Kapchorua reported a profit of Ksh19.4 million, compared to a loss of Ksh125.7 million in the previous period.
Williamson Tea shares gained 43.8% in the past year. Williamson is in tea farming and processing business. It sells its products domestically and overseas. In its latest financial year, Williamson reported a profit of Ksh137 million, reversing a loss of Ksh172 million in the previous period.
Cigarette maker BAT Kenya also made it to the best of the best companies to invest in during the pandemic. Its shares rose 34.4%. In its latest financial year, BAT reported a profit of Ksh5.5 billion on revenue of nearly $40 billion. As cigarette business comes under increasing pressure over health issues, BAT Kenya is pivoting to smokeless nicotine products to survive.
Serena hotels operator TPS Eastern Africa tied with BAT Kenya in stock performance. TPSE shares gained 34.3% in the past year. Hotels were among the hardest-hit businesses during the pandemic as countries went into lockdowns. But that did not stop TPS Serena stock from delivering incredible returns for investors. In its latest financial year, the hotels operator reported a profit of Ksh182 million on revenue of Ksh6.8 billion.
Kenya-Re shares rose 20.8% in the past year to rank it among the best companies to invest in during the pandemic. The company operates in the insurance industry and primarily provides reinsurance services. It has clients across East Africa and beyond. In its latest financial year, Kenya-Re reported a profit of Ksh3.9 billion, rising from Ksh2.3 billion in the previous period.
This should have come first…except it doesn’t look colourful at the top now
There is a company called Nairobi Business Ventures (NBV). It is in the business of selling shoes. You wear shoes but there is a chance you have never heard about this company before. NBV is a tiny company with a market cap of under Ksh100 million.
There is little to write home about NBV’s financials at his point. But you should just know that its shares soared 592% in the past year, beating any other company listed on the Nairobi Securities Exchange. NBV is controlled by a Dubai company called Delta International FZE, which in 2020 completed a transaction to purchase 84% shares in the shoe company for Ksh83 million. Delta plans to shift NBV from the struggling shoe business to cement business.
It remains to be seen if the stocks that have delivered the juicy results in the past year will keep rising. But for now, there is no doubt they deserve an applause. And for those looking for the best companies to invest in Kenya, you have somewhere to start your search and due diligence.