Safaricom is basking in glory after its share price closed last week at an all time high of Ksh25, pushing the mobile operator past the Ksh1 Trillion mark in market capitalization.
This is a vote of confidence by investors in Safaricom, in spite of election jitters.
With its new market capitalisation, Safaricom is now worth more than half of the capital at the Nairobi Securities Exchange (NSE) and nearly a seventh of the country’s GDP of Ksh7.1 trillion. This historical milestone is a first for a company listed on the NSE.
The new gain means that Safaricom shareholders have enjoyed a Sh214 billion gain in their wealth this year. The stock has gained 28 per cent this year on the back of increased demand by foreign investors eyeing dividends. It opened the year at a price of Ksh19.25.
The stock closed Friday at an average price of Sh24.50, earning it a market capitalisation of Sh981.6 billion — which is 42.9 per cent of the total value of all the 63 firms listed on the NSE. Higher earnings at Safaricom have been driven by growth in internet (data) and its M-Pesa mobile phone-based payments business.
Revenue from mobile calls also grew in the year ending in March. Safaricom announced a 27.1 percent rise in net profit to Ksh48.4 billion in the year ended March as sales increased 8.8 per cent to Ksh212.8 billion.
The stock has been flirting with the historic mark for weeks, trading around the Ksh23 level since early June.
Safaricom listed at Ksh5 a share in June 2008, but shareholders endured a few years of subsequent low prices that culminated in the stock sinking to an all-time low of Ksh2.50 a share in 2011.
Since the beginning of March 2017, Safaricom’s shares have risen 45 percent amid strong foreign investor buying and a favorable market outlook. In the coming month, the telco is expected to officially launch its “Masoko” E-Commerce platform and take on local players like Jumia & Kilimall.
NEXT READ:
Leave a comment