The Kenyatta family, the family of former Central Bank governor Philip Ndegwa and Equity Group #ticker:EQTY chief executive James Mwangi have each lost up to Sh2 billion at the Nairobi Securities Exchange #ticker:NSE (NSE) over the past month in the wake of the coronavirus outbreak that has hit stocks.
Mr Mwangi leads the pack after his five percent stake in Equity shed Sh2 billion since February 19, making him one of the biggest victims of the multi-billion shilling share price erosion at the Nairobi bourse.
Equity is one of blue-chip stocks favoured by foreign investors who over the past few weeks have sold their equities holdings across the globe as they seek shelter in fixed income assets, including government bonds.
Mr Mwangi was followed by the Kenyatta family, whose 13.2 percent stake in NCBA Group #ticker:NCBA has lost Sh1.5 billion over the past month, cutting their wealth in the bank to Sh5.5 billion.
NCBA emerged following the merger between the listed NIC Bank and the private CBA Group. The merged shares, including those owned by the Kenyatta family, started trading on October 22 at the bourse.
The Ndegwa family, which owns 12 percent of NCBA, has seen their paper wealth in the merged bank plunge Sh1.3 billion to hit Sh5 billion.
Billionaires who have taken a hit at the NSE over the past month include Co-op Bank #ticker:COOP CEO Gideon Muriuki, investment banker Jimnah Mbaru, Britam chief executive Benson Wairegi and WPP Scangroup boss Bharat Thakrar.
The billionaire investors had stock holdings valued at a total of Sh27.5 billion on February 18, with the market sell-off cutting their wealth to Sh21.6 billion as of Wednesday.
The companies they have invested in are, however, set to pay them dividends of at least Sh1 billion combined in the next few months, offsetting some of the wealth erosion.
Mr Mwangi’s holdings over the one-month period in Equity dropped to Sh7.3 billion from Sh9.4 billion, a decline of 22 percent. But his share price erosion at the NSE is larger when his investments in firms like Britam are reflected.
Mr Mwangi is set to earn gross dividends of Sh471.7 million –the largest payout to an individual investor on the NSE— after the bank enhanced its distribution to Sh2.5 per share for the year ended December.
Equity had been paying dividends of Sh2 per share in the previous years. The larger dividend comes despite the bank preparing to pay Sh10.8 billion in cash to acquire a 66.5 percent stake in Banque Commerciale du Congo (BCDC).
The Kenyattas are set to earn at least Sh197.7 million in dividends from NCBA in the next two months.
As a separate entity, NIC Bank had already paid an interim dividend of Sh0.25 for the half year ended June 2019.
The merged entity is now expected to declare a final dividend of Sh1 per share or more, with the push for higher distributions coming from the relatively more generous dividends that former CBA shareholders were used to.
NCBA, which is set to rank third in terms of assets after publishing its results as a merged entity for the first time, has seen its share price retreat 22 percent in the one-month period.
Mr Mbaru, who owns Dyer & Blair Investment Bank, saw his holdings of 144.8 million units of Britam shares drop by Sh321.4 million as the insurer’s stock plunged 25 percent.
This pushed the value of his stake down to Sh964.3 million from Sh1.2 billion. Mr Wairegi, who has 100.9 million shares in the insurer, recorded a Sh224.1 million paper loss.
The market value of the shares fell from Sh896.7 million to Sh672.5 million. Britam’s dividend payout has been erratic, with the insurer freezing distributions to shareholders in the last financial year (to December 2018).
Mr Muriuki’s ownership of 117.4 million shares of Co-op Bank dropped by Sh264 million as the lender’s share price declined 15.1 percent over the one-month period.
The market value of his holdings fell to Sh1.4 billion from Sh1.7 billion. He is set to earn a gross dividend of Sh117.4 million after the bank declared a payout of Sh1 per share for the year ended December, same as for the prior year.
Co-op Bank reported a 12.4 percent net profit growth to Sh14.3 billion in the review period, helped by a surge in non-interest income.
Scangroup’s Thakrar saw the market value of his 45.3 million shares in the marketing services firm drop by Sh79.2 million to Sh656.8 million from Sh736.1 million. The company’s share price has tumbled 10.7 percent over the past one month despite expectations of a large dividend payout tied to the sale of its stake in data and research firm Kantar.
Scangroup said it will book a gain of Sh2.6 billion in the transaction, allowing it to pay a special dividend of Sh4.6 per share. That will earn Mr Thakrar Sh208.3 million, ranking him second only to Mr Mwangi in the dividend league.