Login to your account

Username *
Password *
Remember Me

Safaricom’s market value at the Nairobi bourse has hit a new high as demand for the telco’s stock continues to outweigh supply.

 

The firm’s valuation at the Nairobi Securities Exchange has risen by Sh104.17 billion year to date, closing yesterday at Sh1.476 trillion.

 

The telecommunication company’s share price closed at a new average all-time high of Sh36.85, representing a 7.6 per cent gain on the year to date. The stock hit a peak of Sh37.2 on intra-day trading, from an opening of Sh34.25 on January 4, as it continued to attract interest from foreign investors.

The telco’s increase in valuation has helped push the total market capitalisation to a one-year high of Sh2.43 trillion.

 

The company’s market capitalisation now accounts for 60.7 per cent of the total investor wealth at the NSE.

 

Analysts have tied the telco’s rally to continued demand for the stock due expectations of the company’s relatively better earnings compared to other listed firms.

 

“There has been no new information that would drive the share price up, but the previous sentiments that have been so far about the financial performance comparative to other stocks like banking and the manufacturing,” Gerald Muriuki, research analyst at Genghis Capital said.

 

Investors have been attracted to Safaricom on anticipation of improved performance of its mobile money platform M-Pesa following the end of the zero-rating of transactions of up to Sh1,000.

 

This is despite the reduction of the transaction charges. Shares of other firms such as East African Breweries Limited (EABL) and banks have remained subdued as the companies’ business models take a hit from the economic ravages of the Covid-19 pandemic.

 

Banks are grappling with defaults and higher provision for bad debt while EABL suffered major revenue loss when bars and most establishments in the hospitality sector were shut for months to contain the pandemic.

 

Business Daily Africa