Safaricom’s share price continued to gain Tuesday when it hit a high of Sh30, staging one of the biggest recoveries in the past two weeks.
The telco closed at an average of Sh29.5, having traded at a range of between Sh28.35 and Sh30. This marked a gain of 4.6 percent compared to Friday last week when it traded at Sh28.2.
The stock has rallied 30 percent from the 52-week low of Sh23 recorded on June 27, signaling that investors have turned bullish on the telco.
The selloff that had pulled the company’s market value below Sh1 trillion was attributed to indiscriminate dumping of Kenya’s listed equities as foreign investors fled riskier frontier and emerging markets in general.
The developing economies have witnessed currency depreciation, rising inflation, and other economic challenges partly linked to the economic fallout from Russia’s invasion of Ukraine.
Safaricom’s short-term profit growth has slowed down due to the heavy capital investments it is making in Ethiopia where it is setting up operations.
The telco’s Kenyan business remains highly profitable, with the company recently disclosing the economics of its mobile money divisions which is now the largest in terms of revenue.
The mobile money business made a profit of Sh50 billion before tax in the year ended March, contributing nearly half of the company’s total gross earnings and solidifying M-Pesa’s position as its most profitable service.
In its latest annual report, while M-Pesa contributed 49 percent of profit before tax of Sh102.2 billion, its revenue of Sh107.7 billion accounted for 36 percent of the company’s total revenue of Sh298.07 billion.