Top billionaires have increased their interests in Safaricom in a move that has seen them join the leading individual shareholder list of the mobile phone operator.
Filings with the Capital Markets Authority (CMA) show that wealthy investors including Chris Kirubi, John Kimani and Baloobhai Patel have been buying more of the Safaricom’s shares in the year to May, when stock hit a five-year high.
Mr Kirubi, who owns shares worth more than Sh3 billion at the Nairobi Securities Exchange (NSE), increased his ownership in Safaricom to 5.5 million shares between February and May, making him the sixth largest local individual shareholder.
Mr Kimani, whose worth of stocks at the Nairobi bourse is more than Sh2 billion, increased his ownership to 8.6 million shares from 5.6 million in the same period while the 75-year-old Patel had five million shares currently worth Sh32. 2 million.
Even though the worth of the Safaricom shares owned by the wealthy investors is small compared to the multi-billion-shilling investments, it demonstrates the rising investor interest on the counter — whose 2008 IPO has presented mixed fortunes and feelings. Along the way, some investors have made millions while others have lost a small fortune.
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The Treasury, which retains a 35 per cent stake in Safaricom, together with Vodafone (40 per cent), has earned billions of shillings in dividends and fees, helped by their large share volumes and special status either as regulators or trading partners of the telco.
For retail investors, the company’s sterling performance has done little to cause excitement, with the majority earning dividends of less than Sh200 and whose cheques or M-Pesa credits can hardly be cashed economically.
Minority shareholders have over the years piled pressure on the company to buy back some of the floated shares in a move that would reduce supply and thereby drive up the stock’s price.
The board has, however, noted that Kenyan laws do not allow share buybacks, adding that an alternative would be to get a strategic investor.
This left small investors with the sole option of selling their shares at a higher price — an opportunity that has been absent for most of the past five years during which the stock traded at below the Sh5 IPO price, with the share flirting with the Sh2 mark for a while.
“Safaricom has recently become very attractive and most of these top investors positioned themselves ahead of the firm’s annual results,” said Robert Bunyi, an analyst at Mavuno Capital.
Safaricom made a net profit of Sh17.5 billion in the year ended March, growing 38.8 per cent compared to Sh12.6 billion a year earlier as sales jumped 16.1 per cent to Sh124.2 billion.
Analysts remain bullish about Safaricom’s prospects going forward, attributing their confidence to the firm’s dominant position and diversification of earnings.
The share has gained 73 per cent over the past year to Sh6.45, but profit taking after the May results has seen the share drop 11.8 per cent over the past month.
Recently Mr Kirubi has focused on high value stocks like KCB, Standard Chartered and Nation Media Group (NMG) where he is the fourth- largest individual shareholder with 495,900 shares worth Sh148.2 million. His other top holdings include Centum Investment (about 23 per cent), Haco Tiger Brands (51 per cent), and Capital FM.