How investment gurus make billions from the stock market

How investment gurus make billions
from the stock market
Billionaire investor and prominent
entrepreneur Chris Kirubi has positioned
himself as a key mover at the Nairobi Securities
Exchange. His moves at the NSE can at times be
as astounding as the money his portfolios hold.
In January this year, for instance, Mr Kirubi and
Centum Investments sold their shares in
insurance group UAP Holdings to Old Mutual in
a deal that earned them over Sh7 billion.
With Mr Kirubi owning a 9.58 per cent stake in
UAP, his stake saw him pocket over Sh2.8 billion
while Centum Investments, which owned 13.75
per cent stake, raked in more than Sh4 billion.
Interestingly, by that time, Mr Kirubi owned a
25.2 per cent stake in Centum Investments,
which would further earn him more proceeds
from the sale.
In September this year, Mr Kirubi was reported
to have added another 4.9 per cent stake in
Centum, making him the biggest shareholder
with a controlling stake of 29.9 per cent. This
stake was acquired in two years and amounted
to 32.6 million shares that were estimated to
have cost him at least Sh1 billion.
Aly Khan Satchu, a financial markets expert and
CEO of Rich Management, says Mr Kirubi has
proven to be a very astute investor at the NSE.
“Mr Kirubi has embraced the concept of
shareholder value, and subsequently, Centum
Investments has proven to be an excellent
model for value creation,” he says.
He adds that the key move that Mr Kirubi made
with Centum was to source out for first-class
human capital and then put them in the cockpit.
This is illustrated by Centum’s recent
recruitment of Ivy League graduate Brian Kiai as
the firm’s deputy director.
Paul Maina, the head of research at Relic
Capital, says Mr Kirubi and Centum garner a
good exit price, which he utilised to divert his
resources towards more acquisition at Centum.
“His strategy is to get into companies in which
he can create value, and Centum is increasingly
proving to be a paragon of value. It meets the
threshold of a great company: big audacious
goals, a clear vision, and home grown
management,” says Maina.

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KENYA AIRWAYS SHARES
In a shocking move in August, Mr Kirubi also
acquired 2.1 million Kenya Airways shares,
valued at Sh11.55 million. This was surprising
as the investment came hot on the heels of a
record-breaking loss by the national carrier in
August.
In its full year results, KQ shocked the country
by announcing a net loss of Sh25.7 billion. This
meant that KQ was in a negative capital position
of Sh5.9 billion.
Although this caused a stir among novice
investors leading to speculative trading, some
analysts have noted that it was not as significant
as his well-articulated decision in buying
Centum shares.
Mr Maina says Mr Kirubi might have been
seeking to calm the markets.
“He most likely wanted to create a positive
outlook to the company and show Kenyans that
KQ can turn around if proper management is
put in place,” says Maina.
“However, novice investors should wait until
the mess at KQ is adequately sorted out.”
JAMES MWORIA, CENTUM CEO
In August, Centum Investment CEO James
Mworia climbed the ladder to the top ten
shareholders club.
This followed his acquisition of 4 million shares
worth Sh207.4 million.
Mr Satchu says insider buying such as Mr
Mworia’s is usually a very positive thing while
“the positive is always a worry”.

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