Investment brokers at the NSE. FILE PHOTO | NMG
Summary
- The telco opened trading at Sh29.50 last Monday, and by last Friday had gained 7.6 per cent or Sh2.25 after sustained demand from investors.
- Analysts say apart from the prospects of higher earnings by the company (which would translate to higher dividends), investors are also looking ahead at possible future gains from new products the telco is introducing into the market.
- Foreign investors, who were largely sellers in the first two months of the year as they took profits on Safaricom, have started buying up the stock again in the past week.
Safaricom’s rally to an all-time high of
Sh31.75 has rewarded its shareholders with a capital gain of Sh90
billion in the past week, and boosted the NSE’s market capitalisation to
a new all-time high of Sh2.83 trillion.
The telco
opened trading at Sh29.50 last Monday, and by last Friday had gained 7.6
per cent or Sh2.25 after sustained demand from investors hoping for
good results for the full year to March 2018.
At
Sh31.75 per share, Safaricom’s market value now stands at Sh1.27
trillion, accounting for 45 per cent of the NSE’s total market cap of
Sh2.83 trillion.
Analysts say apart from the prospects
of higher earnings by the company (which would translate to higher
dividends), investors are also looking ahead at possible future gains
from new products the telco is introducing into the market.
“Safaricom is a ‘go to stock’ for many investors especially
because of its large liquidity. Despite Safaricom trading at a premium
to its fair value, investors seem to be pricing in the innovations
taking place which offer headroom for the business to grow its top line
through data and M-Pesa revenues. There are also possibilities of
Safaricom hitting some resistance at that level once buying interest
subsides,” said Kingdom Securities senior analyst Mercyline Kyalo.
Foreign
investors, who were largely sellers in the first two months of the year
as they took profits on Safaricom, have started buying up the stock
again in the past week, helping drive up the demand.
The
NSE All-Share Index (NASI), climbed to a new all-time high of 192.2
points, with a gains of three per cent in the past one week. The price
weighted NSE 20 share index, on the other hand, gained just 0.2 per cent
during the week to close at 3847 points.
Other stocks have also been on a gaining streak. Banks such as Equity
, KCB , Cooperative , Barclays , NIC and oil marketer Total
are trading at two- to four-year highs, in spite of the lenders’ mixed financial performances in 2017.
Equity
and KCB have both climbed above the Sh50 per share level, with the
former reporting a 14-per cent increase to Sh18.9 billion in net
earnings for 2017.
KCB’s net profit on the other hand was flat at Sh19.7 billion.
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