Kenya Airways, Uchumi shares prices plunging at DSE on lower demand

Dar es Salaam. Share prices for Uchumi Supermarket (USL) and Kenya Airways (KA) plunged during the opening day of the week as investors’ appetite for the firms’ equities remains low in the wake of increasing supply.

The Dar es Salaam Stock Exchange (DSE) market reports show that the price for a share of KA fell by 30.56 per cent to close at Sh250 on Monday from an opening price of Sh360.

The USL share price also recorded went southwards, dropping by 45 per cent on Monday to a closing price of Sh55 from an opening price of Sh100.

Market analysts say the drop of the share prices for two cross-listed companies was due to different scenarios but mainly the increased share supply than the demands.

“There is no any new information which we would have linked with the drop of KA share price at both Nairobi and Dar es Salaam stock exchanges than a mere rule of demand and supply,” says Mr Juventus Simon, chief executive officer of Orbit Securities Limited, brokers and investment advisors at DSE.

Mr Simon told The Citizen that KA was also undergoing company financial restructuring which has caused an increased number of shares on offer than bids.

Market report from NSE show that the company share price also fell to KSh11.40 this week from Sh14.20 recorded last month.

On USL, Mr Simon said the share price fall might have been due to ongoing financial difficulties facing the company within East Africa.

“As you are aware that Uchumi Supermarket has failed to pay salaries for its employees as well as suppliers. All these problems might have caused the volatility of the company’s share price,” he said.

As a result, many shareholders are now willing to sell their shares while demand for the same remains low.