Safaricom’s shares traded at an 18-month high as investors rushed to buy the stock ahead of the mobile phone services provider closing its books to pay dividends on Thursday.
Shares of Kenya’s largest mobile phone firm by customer numbers and most profitable company in Kenya traded at Ksh4.2 ($0.05) in Tuesday’s trading at the Nairobi Securities Exchange.
The company will close its books on Thursday to pay a dividend of Ksh0.22 cents per share, a 10 per cent increase compared with the previous year. Any investor who will buy shares after Thursday will be locked out from receiving a dividend.
“There has been a lot of trading on the stock ahead of its book closure on Friday,” said Eric Musau, a research analyst at Standard Investment Bank.
The investment bank, in a research note said there was growing interest for the stock from foreign investors. Investors have been flocking back to the stock market resulting in shares touch a 14 month high at the end of last week.
The NSE closed last week at 3,899 points. Mr Musau expects Safaricom to post strong half year results in the six months ended September 2012. This will be as a result of better macro-economic environment for a large part of this year with the shilling remaining stable, the cost of borrowing falling and a drop in inflation helping to spur consumer spending.
Also, the growth in non-voice revenue, especially M-Pesa, the mobile phone money transfer service, should help Safaricom report stronger revenues in the first half.
Safaricom posted Ksh12.6 billion ($150.3 million) profit in after tax in its full year ended March 2012, which was a four per cent drop compared with the Ksh13.2 billion ($156.66 million) a year ago.
But Safaricom stands on solid ground compared to its rivals who are posting losses and need cash injections to strengthen their operations. Its competitors, Bharti Airtel, Essar and France Telkom have posted losses in their last financial year.
In Kenya, Airtel losses mounted to $79.1 million in 2012, from $72.74 million last year.
Essar lost an estimated Ksh2 billion ($23.8 million) to Ksh3 billion ($35.7 million) in the past financial year. France Telkom posted a loss of Ksh18 billion ($214.2) in 2011.