Former BOC Kenya chairman Ngugi Kiuna has bought an extra 308,700 shares worth Sh20 million in the industrial gas manufacturer in what has seen him rise one place to rank as the second-largest shareholder.
His stake rose from 5.25 per cent in April 2018 to 6.83 per cent in March, according to the Nairobi Securities Exchange-listed firm’s latest annual report.
Mr Ngugi first appeared in BOC’s list of top shareholders in 2014 when he bought 74,300 shares and has been building his stake steadily since then.
The increased share purchases are seen as an expression of confidence in the firm’s future prospects. The 6.83 per cent stake is currently worth Sh86.7 million based on the company’s last traded share price of Sh65.
Stock purchases by insiders are ordinarily seen as a vote of confidence in the companies’ future prospects given that they have better insights into the organisations they lead.
Mr Ngugi was a long-time director of BOC whose board he joined in 1993 as a non-executive director. The businessman was appointed the chairman of the firm in 2012, a position he held until June 22, 2018, when he resigned.
Share purchases by insiders, when done in the open market, could also be an indication of the belief that their stocks are undervalued.
BOC declared a total dividend per share of Sh5.2 for the year ended December, representing a yield of eight per cent.
The firm is currently valued in the market at Sh1.2 billion, a 16.4 per cent discount to the firm’s book value of Sh1.5 billion as of December.