Money Markets

Safaricom hits five-year high of Sh7 a share

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Safaricom Customer Care Centre on Moi Avenue, Nairobi. Photo/File

Safaricom Customer Care Centre on Moi Avenue, Nairobi. On Thursday, Safaricom went up by 2.2 per cent, with over 22 million shares changing hands. FILE 

By GEORGE NGIGI

Posted  Thursday, May 2  2013 at  19:16

Safaricom on Thursday touched a five-year high of Sh7 per share, driven by increased investor demand for the stock two weeks before the telecoms giant releases its full-year results.

The firm is expected to report improved performance boosted by increased voice revenues, data and its popular money transfer service, M-Pesa.

On Thursday, Safaricom went up by 2.2 per cent, with over 22 million shares changing hands. Activity in the telecommunication counter pushed up the performance of the total market with the indicative 20-Share Index rising 23 points to close at 4,788.26 points.

“The recent Communications Commission of Kenya report has people thinking Safaricom will surpass its revenues and M-Shwari will also boost them,” said Halima Saadia, an analyst with Old Mutual Securities.

“The dividend is also expected to go up as they have not outlined any high capital expenditure; they have no need to retain cash and may need to reward the shareholders” she said.

Safaricom has risen 55.7 per cent in the past six months.

In separate research reports, analysts at Morgan Stanley and Renaissance Capital had revised their price target for Safaricom share to between Sh6.40 and Sh7, citing lower market risks.

Morgan Stanley believes Safaricom’s absolute amount of capital expenditure peaked in 2012 and should stabilise at approximately Sh25 billion.