Centum’s chief executive James Mworia has acquired four million shares worth Sh207.4 million in the investment company, breaking into the list of the firm’s top 10 shareholders. The latest stock market filings for June show Mr Mworia is now the fourth largest individual shareholder with a 0.61 per cent stake in the Nairobi Securities Exchange (NSE)-listed firm.
“I bought the shares in the open market. My goal is to become a sizeable shareholder in the company,” Mr Mworia said without specifying to what level he would like to raise his stake.
“It definitely shows my confidence in the company,” he added, echoing the view that share purchases by senior executives is a reflection of their confidence in the companies’ future prospects.
This is based on the fact that the high-ranking staff have deep insights into the financial position, risk and operations of the companies they lead. Such purchases, when done in the open market, could also be an indication of senior executives’ belief that their stocks are fairly or undervalued.
Significant purchases
Mr Mworia joins Centum’s top owners including Mr Chris Kirubi who has the single largest stake at 26 per cent and billionaire investor John Kibunga Kimani whose equity stands at 0.9 per cent.
The Centum CEO also joins the ranks of executives who own shares in the publicly traded firms they lead. Mr Frank Ireri, the CEO of Housing Finance, and Michael Matu (Olympia Capital) are some of the executives who have a piece of the companies they manage.
These executives are, however, still far from joining the club of billionaire shareholder CEOs where Equity Group’s James Mwangi, Scangroup’s Bharat Thakrar, Co-op Bank’s Gideon Muriuki and ARM Cement’s Pradeep Paunrana belong.
Mr Mworia has in the past held and sold small volumes of Centum’s shares, with his latest significant purchases read as a signal of his confidence about the company’s future outlook. In 2012 his interest in the investment firm stood at 0.02 per cent.
Centum posted a 160 per cent growth in net profit for the year ended March, helped by a huge gain that it booked from the sale of its stake in insurance group UAP Holdings.
Its net profit in the period stood at Sh7.9 billion compared to Sh3 billion the year before. The firm earned Sh5.2 billion from the sale of its 13 per cent stake in UAP to Old Mutual, booking a gain of Sh2.8 billion in the transaction.
The company also exited two investment funds (Helios and Nigeria-based African Capital Alliance) in a Sh500 million transaction, from which it reported a gain of about Sh100 million. Centum plans to exit investments in which it holds minority stakes.
