Safaricom share rides on impressive results to hit new high

Money Markets

Safaricom made a net profit of Sh14.7bn against revenue of Sh79.3bn in half-year results. 

By GEORGE NGIGI

In Summary

• Safaricom has continued to attract foreign investors who contributed 95 per cent of the buys last week.
• The share touched an all-time high of Sh14 per unit on Thursday but did not repeat the same feat on Friday when it traded at an intra-day high of Sh13.95.
• The company made a net profit of Sh14.7 billion against revenue of Sh79.3 billion.

Safaricom’s share touched a historic price of Sh14 last week following heavy investor demand riding on the telco’s release of half-year results three weeks ago.

The company has continued to attract foreign investors who contributed 95 per cent of the buys last week.

In Friday’s trading the company share price averaged Sh13.80, down from the previous day’s Sh13.90 with 12,068,000 shares changing hands.

The share touched an all-time high of Sh14 per unit on Thursday but did not repeat the same feat on Friday when it traded at an intra-day high of Sh13.95.

“The company is generally well run and one can see the growing business lines, data and mobile money, so the predictability gives investors confidence,” said Silha Rasugu, research analyst at Genghis Capital.

Safaricom had held steady at Sh12.20 before it announced a 30.6 per cent growth in after-tax profits for the six-month period that ended in September.

The company made a net profit of Sh14.7 billion against revenue of Sh79.3 billion.

Safaricom is also the largest seller of mobile phones with a network of shops around the country, registering a 40 per cent growth in handset sales to Sh3.1 billion in the six months to September.

Just before the company released results, foreigners were net sellers of the shares in the stock market.

There were also concerns that the telco was likely to take a hit from the entry of Equitel, a product of Equity Bank’s collaboration with Airtel, especially on the mobile money side of business.

READ: Equity issuing free Equitel SIM cards to customers

Analysts at Genghis Capital however hold that the impact, if any, will not be felt in the short term.

“M-Pesa knowledge of the market has been unmatched so it is easy for them to counter competitors,” said Mr Rasugu.

Safaricom has already moved into a higher gear in its marketing campaigns with subscribers currently receiving a Sh50 bonus talk time for spending over Sh50 a day.

The telco is also sending alerts to callers whose phone calls do not go through, notifying them that the other party is now available to receive the call contrary to the past where the alert was sent to recipients of the calls.