Investors ask for higher pay

Minority shareholders are pushing for higher returns from their investment especially in agricultural companies listed at the Nairobi Stock Exchange, as the weak shilling sets them up for a rich harvest from exports.

ApexAfrica Capital, a local stockbroking firm, also says most agricultural stocks were undervalued given some of their key assets, like land, have been understated on balance sheets.

“The most undervalued companies according to our analysis are those in the agriculture sector,” Mr Kassim Bharadia, ApexAfrica Capital managing director, said.

“This is because these companies sit on huge tracts of prime real estate, generating consumables for export,” he told at an investor briefing on Monday.

Unlike other listed firms that show a true picture of their health, Mr Bharadia, whose company has invested heavily in farming stocks, said listed agriculture firms hide behind bland annual reports, “using any excuse” to expand their already vast cash reserves.

This undermined the rights of minority shareholders, who, he said, become pawns to provide cheap capital in exchange for paltry dividends.

In light of the appreciation in real estate values, coupled with more favourable forex rates and conducive weather, minority shareholders were now pushing for the release of greater profits, Mr Bharadia said.

Source: www.nation.co.ke

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