Kenyan Institutional Investors Buy Up Safaricom Stock

Dilip Pal Safaricom CFO and Peter Ndegwa the CEO

Kenyan institutional investors have acquired shares worth KES 9.5 billion in Safaricom following the exit of domestic shareholders and foreigners.

According to The Business Daily, this reverses the government’s objective of boosting Kenyan retail investors’ stake in the country’s most profitable firm.

Regulatory filings with the Capital Markets Authority (CMA) show that local institutional investors, including insurance firms and pension schemes, bought 340.7 million shares between August 2020 and July 2022. 

According to July regulatory filings, domestic investors, including citizens of East African countries, now hold 1.51 billion telco stock units, equivalent to a 3.79 per cent stake.

During the same period, foreign investors more than doubled their combined stake to 10.17 per cent from five per cent.

Genghis Capital, the investment bank, says investors need to accumulate shares in Safaricom, stating that the company’s fundamentals remain strong. 

“We believe that this free cash generation machine will weather the prevailing uncertainties in the market. That said, we believe that the stock offers an entry point for local investors. Against our target price of KES 45.04, the stock presents a c.60.57% upside potential.”

The current share price of Safaricom Plc (SCOM) is KES 28.95. The telco closed its last trading day (Monday, August 29, 2022) at 28.95 KES per share on the Nairobi Securities Exchange (NSE), a 3.2% gain over its previous closing price of 28.05 KES.

Safaricom began the year with a share price of 37.95 KES, but it has since lost 23.7% off that price valuation, ranking it 59th on the NSE in year-to-date performance.


Leave a reply