Markets & Finance

Safaricom share hits high of Sh20.25 as investors seek to book dividend gain


A broker at the Nairobi Stock Exchange. Safaricom’s share extended its all-time high closing price to Sh20.25 following Wednesay’s trading at the Nairobi Securities Exchange ( NSE). File

Safaricom’s share extended its all-time high closing price to Sh20.25 following Wednesay’s trading at the Nairobi Securities Exchange ( NSE), adding Sh10 billion to its market capitalisation.

The telco has been on a mini rally since it announced that it will pay an interim dividend of 68 cents per share for the year ending March 2017 to shareholders who will be on its books as of September 2.

This dividend will be paid at the same time as the full-year final dividend of 76 cents due for the year that ended in March 2016, and whose books close on September 2 as well, meaning that the investors will be getting a total of Sh1.44 payout in December.

The NSE 20 share index rose for the second consecutive session, although only marginally by a point to close at 3479.73 points. The All Share index also added 0.69 points to close the day at 145.29 points, both helped upwards by Safaricom gains.

“Safaricom still dominated trading and accounted for 31 per cent of trading. The telco was up a further 1.3 per cent on continued foreign investor buying (90.6 per cent of buys),” said Standard Investment Bank in a market note.

READ: Safaricom now valued at record high

In the one-and-a-half weeks since the interim dividend was announced, the Safaricom counter has gained Sh2.15, translating to a market capitalisation gain of Sh86.14 billion to stand at Sh811.3 billion Wednesday.

Big cap counters faltered

It has helped boost the overall market cap for the bourse.

The NSE’s market cap was up Wednesday by Sh10 billion to Sh2.092 trillion even as the other big cap counters faltered. The marekt cap gains since Safaricom began its dividend-fuelled rally is now Sh96.2 billion.

The East African Breweries Limited (EABL) was down by Sh3 per share to close at Sh283, while KCB shed 50 cents to Sh31.50.

The most notable declines were recorded by newly listed Deacons East Africa and the Stanlib Fahari I-Reit.

Deacons, which entered the market on Tuesday at a share price of Sh15, lost the maximum 10 per cent yesterday—equivalent to Sh1.50—to close at Sh13.50.

The fashion retailer was however thinly traded with only 5,100 shares changing hands during the day.

Stanlib’s I-Reit shed 9.6 per cent as it dropped by Sh1.75 to Sh16.35, having opened the day at Sh18.10. The new price marks the new all-time low for the I-Reit, which was the first of its kind to list on the market in November last year.

The drop in valuation also comes at a time when Fusion Capital has been forced to extend the sale of its Sh2.3 billion development real estate investment trust (D-Reit) on the back of what may be lower-than-expected interest from investors.