Safaricom CEO Peter Ndegwa on Thursday, May 18 sought to shed light on the continued decline of Safaricom’s stock price at the Nairobi Securities Exchange (NSE). From an all-time high of Ksh44.95 per share in mid-2021, the stock has been on a steady downward spiral and touched Ksh13.00 per share on May 15.
Safaricom closed Thursday, May 18 trading at Ksh14.85, down from Ksh15.50 the previous day.
In a TV interview with Citizen TV’s Yvonne Okwara, Ndegwa attributed the decline of Safaricom stocks to external factors including the long-running bear run at the NSE and the exit of foreign investors from the bourse, maintaining that the company’s business fundamentals remained solid.
“You’re right there’s been a downward trend on our share on the Nairobi Stock Exchange almost 50 percent in the past year or so but it’s actually when you look at it, the whole exchange has actually been dropping. Most of the shares on the stock exchange have been impacted,” he noted. “When you look at the fundamentals, our business analysts who actually follow Safaricom value the share at between 20 and 39 shillings so an average of about 28 to 30 shillings so it means that it is trading at a 50 discount which shows that actually, the driver of the shares on the stock exchange is beyond the fundamentals of the business.
READ>Safaricom Net Profit Falls to Ksh52.5 Billion
Safaricom posted a net profit of Ksh52.48 billion for the year ended March 2023, down from Ksh67.49 billion posted in 2022. It was the third consecutive profit fall after the telco posted a 6.8 per cent profit slide in 2021, the first in nine years. Ndegwa highlighted the impact of the costs of expanding into Ethiopia in the past year.
News of the earnings drop announced by Safaricom this week saw over Ksh32 billion in paper wealth wiped off at the telco’s NSE counter. On Thursday, May 11, Safaricom’s share price slid to Ksh14.80, down from Ksh15.30 on Wednesday.
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