Money Markets
By GEOFFREY IRUNGU, girungu@ke.nationmedia.com
In Summary
Safaricom stock on Monday shed Sh62.1 billion in the sharpest single-day drop for months as it started trading ex-dividend.
The average price a share fell by 7.5 per cent to Sh18.40
compared to last Friday’s price of Sh19.95. The largest bourse stock’s
capitalisation fell to Sh737.2 billion from Friday’s Sh799.3 billion.
The price had risen as foreign investors trooped to
the Nairobi bourse to buy the share, raising demand as supply remained
constrained.
The telco has declared a special dividend of 68
cents and the annual dividend of 76 cents, totalling Sh1.44 a share —
the highest-ever payment it has given investors in a single year. Both
dividends are payable on December 1, but books closed last Friday.
“The Safaricom dividends and improved prospects for
the company has been attracting foreign investors into the company. So
they want to reap the dividends that will be paid,” said Paul Mwai,
chief executive of Nairobi-based brokerage firm AIB Capital, in an
interview last week.
At Sh18.40, the company’s share price is still 15.4
per cent lower than its historically highest price of Sh21.75 which was
struck late last month.
On Monday, it traded a total of 5.36 million shares
at a low of Sh18 and a high of Sh19.00 – averaging Sh18.40 on a
volume-weighted basis.
Foreign investors returned to the bourse in a big
way last month, with most of the inflows, amounting to Sh2.3 billion,
buying into Safaricom shares.
The total overseas net portfolio investment in the
companies listed on the Nairobi Securities Exchange (NSE) amounted to
Sh3.7 billion or nearly four times the Sh978 million posted in July. In
August last year, net overseas inflows stood at Sh914 million.
Net inflows have ranged between Sh300 million and
Sh900 million a month this year, with last month recording the highest
amount.
On Monday, the NSE 20 Share Index fell by 16.59
points to stand at 3171.28 partly thanks to Safaricom. Foreigners
accounted for most of the trading.
“Foreign investors assumed a net buying position by
accounting for 82.7 per cent of total market purchases and 73.5 per
cent of total market sales,” said Dyer and Blair Investment Bank in an
update on Monday’s trading.
The banking sector was the most active as it had
65.91 per cent of the day’s traded volume. Equity Group Holdings was the
day’s largest mover with 15 million shares trading at an unchanged
average price of Sh26.50.
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