Williamson Tea gains most in two years on dividend

Williamson Tea Kenya Ltd., the country's second-biggest producer of the leaves, jumped the most in more than two years after announcing a dividend yesterday.

The stock jumped 46 shillings, or 18 percent, the biggest percentage increase since Nov. 30, 2009, to 301 shillings at the 3 p.m. close in Nairobi, the capital. More than 10 times the average volume of shares traded over the past three months changed hands, according to data compiled by Bloomberg.

Williamson will pay a dividend of 50 shillings per share for the 12 months through March, the Nairobi-based company said in a statement e-mailed by the stock exchange yesterday.

The distribution “is essentially going to be the catalyst of re-pricing not only of Williamson but also those companies that start to distribute a more fair dividend to their shareholders,” Aly Khan Satchu, chief executive officer of Nairobi-based investment company Rich Management, said in a phone interview today. Satchu said he has owned shares in the company for five years.

“The company's share price is going to go considerably higher because fundamentally this sector has been deeply undervalued for a number of years because tea and coffee prices were depressed for a long period,” Satchu said.