KPC Shares Jump 7.9% to KSh 9.78 as Investors Welcome Dangote's 24.7% StakeKPC Shares Jump 7.9% to KSh 9.78 as Investors Welcome Dangote's 24.7% Stake

The stock closed the previous session at KSh 9.06 ($0.07) on the Nairobi bourse. Business Daily reported that Dangote's entry has been viewed as a vote of confidence in the mid-stream oil company, and that he is expected to make fresh investments in the business.

What the price move shows

The jump is an intraday high, not a closing price, so the day's final level may differ. The source does not give KPC's listing price, and Mwenendo has not compared the move with it. Minority holders who bought earlier will see the rise as relief, but the shares are still priced in single shillings.

As Mwenendo earlier reported, the block of about 4.5 billion shares worth KSh 42.5B ($327.12M) stopped just shy of a takeover, below the 25% line at which Kenyan takeover rules require an offer to every shareholder. That means other investors have had no chance to sell to the buyer at the same price.

Questions for regulators

Mwenendo has also set out why the Competition Authority should answer publicly on a refiner holding a quarter of the pipeline that carries rivals' fuel. Neither the price move nor the reported investment plans settle that question.

Investors should note that no dividend, contract or investment commitment from the new shareholder has been confirmed, and the rally rests on sentiment rather than a change in KPC's earnings.