Capital Markets

Safaricom shares rally to a new record high

safaricom

A man makes a phone call next to a Safaricom's logo. FILE PHOTO | NMG

Summary

  • Safaricom shares have rallied 47.5 per cent so far this year
  • This is more than double the average gain of the entire stock exchange.
  • Safaricom had slipped in days after the boycott call but analysts attributed the fall to general market moves

Safaricom #ticker:SCOM share price jumped 5.6 per cent on Wednesday to touch a new record high of Sh28.25 each.

This came as foreign investors rushed back to the Nairobi Securities Exchange (NSE) #ticker:NSE after political tension in the country showed signs of calming down.

The telecom giant – which is also the most capitalised company on the NSE – was the main beneficiary of foreign buy, with analysts expecting it to rally further if interest from foreign buyers continues in coming days.

READ: NSE shares up Sh50bn as markets react to ruling

“We’ve seen a lot of interest from foreign buyers in the last few sessions. This is expected to continue as the market recovers from the election slump,” said Stella Wambugu, a dealer at Standard Investment Bank (SIB).

47.5pc growth

Safaricom shares have rallied 47.5 per cent so far this year, more than double the average gain of the entire stock exchange.

The bourse suffered a dearth in turnover and share prices dropped in the weeks after the Supreme Court annulled an August 8 presidential election.

The apex court on Monday upheld President Uhuru Kenyatta’s win in last month’s repeat vote, a decision analysts said had cleared the political cloud from the markets.

READ: Foreign exits from Safaricom drag down the market

At the height of the political crisis in October, opposition party Nasa called for a boycott of Safaricom products on allegation that it failed to transmit results during the August 8 election.

Safaricom had slipped in days after the boycott call but analysts attributed the fall to general market moves that had nothing to do with the call.

READ: Safaricom shares deal earns UK Sh13bn tax