The share price closed Wednesday trading at Sh31.80 up from Monday’s Sh30.75, pushing its market valuation to Sh1.27 trillion, the highest since February 12 when the share closed at Sh32.5.
The rise in Safaricom share, which accounts for more than half of combined investors’ wealth at the Nairobi bourse, has send the market capitalisation to Sh2.265 trillion — the highest since early May.
Analysts said Wednesday foreign investors’ interest in Safaricom share is on account that the telco’s drop in performance was minimal compared to what investors had expected.
Safaricom #ticker:SCOM share price hit a nine-month high yesterday on increased demand from foreign investors, defying the six per cent drop in half-year net profit as M-Pesa, voice and messaging revenue dipped.
The share price closed Wednesday trading at Sh31.80 up from Monday’s Sh30.75, pushing its market valuation to Sh1.27 trillion, the highest since February 12 when the share closed at Sh32.5.
The rise in Safaricom share, which accounts for more than half of combined investors’ wealth at the Nairobi bourse, has send the market capitalisation to Sh2.265 trillion — the highest since early May.
Analysts said Wednesday foreign investors’ interest in Safaricom share is on account that the telco’s drop in performance was minimal compared to what investors had expected.
“We are seeing a lot of buying from foreign investors. The results were better than what had been expected given the economic hardships in the Covid-19 environment,” said Gerald Muriuki, research analyst at Genghis Capital.
Safaricom on Monday announced a six per cent drop in half-year net profit to Sh33.07 billion — the first time since 2011 for the telco to fail to grow half year earnings.
AIB-AXYS Africa data shows that foreign investors yesterday bought Safaricom shares valued at Sh267.769 million, being nearly five times the Sh60.02 million stocks they purchased on Monday.
Safaricom closed yesterday as the most traded share with foreigners commanding 99.7 per cent of the Sh268.67 million that the telco’s counter traded.
The telco’s share last traded above the yesterday level during pre-Covid-19 era on February 12 when it closed on Sh32.50.
However, the discovery of the first case of Covid-19 in Kenya mid-March saw the share start falling, hitting a low of Sh24.35 during the same month.
The telco said on Monday that while zero-rating of fees on transactions of up to Sh1,000 had hurt M-Pesa revenue, the move had helped it win new customers.
One month active M-Pesa customers increased by 13.5 per cent to 26.79 million
Total M-Pesa transaction value grew by 32.9 per cent to Sh9.04 trillion while the volume of transactions grew by 14.9 per cent to 5.12 billion transactions.
M-Pesa revenue however dropped by Sh6.08 billion or 14.5 per cent to Sh35.89 billion on account of Sh1.76 trillion being transacted within the zero-rated window.
Voice and messaging revenues dipped by Sh2.79 billion and Sh0.53 billion respectively, coming in the period in which the state enforce disruptive measures such as curfew and ban on social gatherings to contain the spread of the virus.
However, the telco benefitted from the increased number of people who were working from home to lower risks of contracting the infectious virus.
Mobile data revenue grew by 14.1 per cent to Sh22.23 billion while fibre to home revenues rose by 47.2 per cent to Sh1.64 billion.
Safaricom says that uncertainties still persist for the full year given the recent surge in infections, the continued zero-rating of M-Pesa transactions of Sh1,000 and how customers will react when charges are reinstated.
The telco therefore says it expects earnings before interest and taxes to be in the range of between Sh91 billon and Sh94 billion, a decline of 10.5 per cent to 7.5 per cent.
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