NSE value nears Sh2trn after Safaricom surges to new high

A broker trades at the NSE. Safaricom surged to a new high of Sh11.70 January 9, 2014, lifting the stock exchange to just shy of touching the Sh2 trillion total market valuation mark. Photo/FILE 

By CHARLES MWANIKI

Posted  Thursday, January 9   2014 at  19:39

In Summary

• The telco’s stock opened the year in bullish form which continued Thursday with trading of 24 million shares at between Sh11.55 and Sh11.95 each.
• The bourse is already three per cent up this year after just six trading sessions, having registered a full year gain of 19 per cent in 2013.
• The bullish sentiment is expected to continue at least for the first quarter of the year, with analysts pointing at favourable economic conditions and low likelihood of market shocks.

Safaricom surged to a new high of Sh11.70 Thursday, lifting the stock exchange to just shy of touching the Sh2 trillion total market valuation mark.

The telco’s stock opened the year in bullish form which continued Thursday with trading of 24 million shares at between Sh11.55 and Sh11.95 each.

The company’s new closing high saw its valuation rise to Sh468.5 billion, which is almost double the Sh236 billion valuation of East Africa Breweries Limited (EABL), the second most valuable company at the Nairobi Securities Exchange (NSE).

The NSE 20-Share Index, which broke through the 5,000 points mark on Wednesday, recorded a second straight day of strong gains surging by 33 points to stand at 5,044 points.

The All Share Index (NASI) was also gaining, up by 1.24 points to close at 141.59 points.

Total market capitalisation rose by more than Sh2 billion from Sh1.97 trillion on Wednesday.

“The market continued charging upwards for the fourth day this week with Safaricom rising 3.1 per cent as foreign investors continued to build positions on the telco,” said Standard Investment Bank in its daily market report.

The bourse is already three per cent up this year after just six trading sessions, having registered a full year gain of 19 per cent in 2013.

The bullish sentiment is expected to continue at least for the first quarter of the year, with analysts pointing at favourable economic conditions and low likelihood of market shocks.

“Going forward, with no short-term macro-economic threats in sight, we anticipate the index to advance further and the 5,100-point mark as a support level in quarter one,” said Genghis capital in a note to clients.

Main mover

The insurance sector has also seen brisk trading this week, with the sector accounting for 14 per cent of the day’s traded volume, ahead of the banking sector which accounted for 13 per cent.

The main mover in the market remained the telecommunications segment, which accounted for 58 per cent of the days traded volume as Safaricom moved 24 million shares.

A total of 41.9 million shares were traded Thursday, up from 15.9 million on Wednesday.

The day’s top gainer was ScanGroup, which went up by 7.7 per cent to Sh56, while Car & General was up by 6.3 per cent to Sh29.75.