Safaricom’s stock price has reached another all-time high (ATH) of Sh31.75, rewarding its shareholders with a capital gain of Sh90 billion in the past week. The new price has increased NSE’s market capitalisation to a new high of Sh2.83 trillion.
The telco opened trading at Sh29.50 last Monday and by Friday, it had gained Sh2.25 (7.6 percent) thanks to investors holding a bullish position as they await good results for the full fiscal year which will end this month.
The new price per share puts Safaricom’s market value at Sh1.27 trillion, accounting for 45 percent of NSE’s total market cap of Sh2.83 trillion.
According to analysts, investors are hoping for higher earnings which will mean higher dividends as well as hoping for future gains from the new products the company is about to introduce.
“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,” Kingdom Securities senior analyst Mercyline Kyalo stated.
Foreign investors who were selling the stock in the first two months of 2018 are now buying it again to help propel demand.
The NSE All-Share Index (NASI) surged to a new ATH of 192.2 points, with a 3 percent gain in the past one week.
Other stocks that have gained momentum are Equity Bank, KCB, Co-op Bank, Barclays, NIC, and Total. The stocks are trading at two to 4-year highs despite the mixed 2017 financial performances that the banks have reported.
Equity and KCB stocks have increased beyond the Sh50 per share mark with Equity posting a 14 percent increase to Sh18.9 billion in net earnings for 2017.