Billionaire Peter Munga has lost at least Sh200 million in paper wealth from his investment at Britam Holdings in just eight months as the current economic woes affect every sector including listed companies at the Nairobi Securities Exchange (NSE).
The NSE is bearing the brunt of rising inflation, growing interest rates, depreciating shilling, general investor apathy, lack of new listings, poor performance of listed firms and the massive selloffs by international investors.
Investors on NSE have lost a total of 777.83 billion ($6.37 billion) as the value of listed firms plunged by 28 percent in the last nine months, according to the tracking of data by sauce.co.ke.
Britam Holdings where Munga is one of the shareholders has dropped its value at the NSE by nearly 40 percent during the same period. Its share price has fallen from Sh6.94 to Sh4.17. This has losses running to hundreds of billions for its shareholders.
Munga, who is one of the richest men in Kenya is a non-executive director at Britam and a co-founder and former chairman of Equity Group Holdings. He owns 72 million Britam shares, making him one of the company’s largest shareholders. The value of his shares have fallen by 199.4 million in the last eight months.
Munga, 77, is the founder of Equity Building Society, the microfinance bank he founded in 1984 which eventually became Equity Bank, Kenya’s largest commercial bank. He previously owned as much as 3.2 percent in Equity Bank but has since sold off most of his shares.
Britam, where Munga is a major shareholder posted a Sh1.69 billion net profit for the year ending December 2022 on reduced costs, marking a recovery from Sh72 million earned in the previous year.
The rise in net profit was despite the diversified financial services firm posting a drop in its income from Sh40.2 billion to Sh38.2 billion. Britam’s bottom line was helped by a cut in expenses by 9.5 percent or Sh3.68 billion to Sh35.25 billion, mainly on reduced operating costs which fell by 26 percent from Sh11.32 billion to Sh8.37 billion.
“The improved performance is attributable to a growth in top-line revenue as well as operating efficiency and cost management initiatives,” said Britam.
“This, together with improved dividend and interest income, helped cushion the significant fair value losses to register improved profitability.”
Shareholders, however, did not receive a dividend just like the two previous years.
