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Safaricom’s share price reached an all-time high of about Ksh 39.9 ($ 0.37) per share on April 28. Investors rallied around the company as news spread that the telecom operator is close to securing an operating license in Ethiopia.
Eleven million shares worth Ksh 441.7 million were sold between Ksh 39 and an all-time high of Ksh 40.2, Business Daily reported. This brought the share value to an average of Ksh 39.9 by close of day.
Foreign investors were the net buyers of the shares.
The surge in demand for Safaricom’s shares triggered its market value to reach almost Ksh 1.6 trillion, the highest level since its listing on the Nairobi Securities Exchange in 2008.
Before the rush, Safaricom warned shareholders to be cautious when buying and selling its shares in the wake of the Ethiopia bid. Envisaging the possibility of both positive and negative sentiments, the company alerted investors to tread with caution.
The Peter Ndegwa-run company applied for an operating license on the Ethiopian market as part of a consortium on April 6.
The consortium includes its parent companies Vodacom Group, Vodafone Plc, the UK sovereign wealth fund CDC Group and the Japanese conglomerate Sumitomo Corporation.
Among its 10 competitors, only MTN remains in the race for the license. Etisalat, Axian, Orange, the Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, Kandu Global Communications and Electromecha International Projects all dropped their bids on the grounds of a lack of transparency from the Ethiopian government.
Kenya’s Safaricom dominates the country’s mobile money market, with an almost 99-percent market share as of July 2020. Although it has not declared its results for 2020, which are expected in May, in 2019 it earned Ksh 240.3 billion ($2.23 billion).
