Why Centum shares fell today
|Centum CEO James Mworia|
Investors retreated from Centum Investment Company shares today (September 4). The shares fell 0.47% to close at Ksh21.40. That compared with 0.14% gain of the blue-chip NSE 20-Share Index. The broader market tracker NSE All-Share Index fell 1.40%.
KRA tax demand shakes Centum shares
Centum shares dropped today after the Business Daily newspaper reportedthat the company could lose as much as Ksh3.7 billion over a KRA tax dispute.
The KRA issue that caused some investors to turn away from Centum shares today is tied to Centum’s sale of its stakes in Coca-Cola subsidiaries. Last year, Centum made Ksh19.3 billion after selling its 53.9% stake in Almasi Beverages Limited and 27.6% stake in Nairobi Bottlers Limited to Coca-Cola Beverages Africa.
Centum’s sale of the Coca-Cola subsidiaries came at a time when the businesses were fighting a KRA tax demand tied to returnable bottles. Therefore, Coca-Cola Beverages Africa required Centum to guarantee the payment of tax liabilities that may arise if KRA wins the tax dispute in the court. According to the newspaper, Centum has made arrangements to set aside Ksh3.7 billion to cover the potential tax liabilities.
Centum share price history in 2020
Centum share price has been under pressure in 2020. The coronavirus situation has generally weighed on the stock market this year. Centum shares opened the year at Ksh29.60 and managed to sprint to Ksh30 in early January. But those gains were short-lived as the shares crashed to a low of Ksh19.60 in March, the month Kenya started reporting Covid-19 cases.
Looking at Centum share price history in 2020 by month, the stock closed at Ksh28.25 in January, Ksh24.60 in February, Ksh22.55 in March, Ksh25.15 in April, Ksh23.05 in May, Ksh25.55 in June, Ksh23.10 in July and Ksh21.50 in August. Finally, Centum changed its ticker symbol to “CTUM” from “ICDC”.