Safaricom’s capital gain in the midst of a general price decline at the Nairobi Securities Exchange (NSE) has pushed its capitalisation ahead of the five next largest companies in the bourse.
The company is now valued at Sh657.07 billion, while the combined market caps of the East Africa Breweries Limited (EABL), Equity Holdings, KCB, Cooperative Bank and BAT Kenya stand at Sh655.4 billion going by Monday’s closing prices.
Safaricom is currently trading at Sh16.40 at the NSE having gained 16.7 per cent since the beginning of the year. This has translated to a capitalisation gain of Sh94.2 billion.
“Safaricom’s financial performance is helping. It is one of the few which are seen by investors as safe bets going forward,” said ABC Capital corporate finance and advisory manager Johnson Nderi.
“The issue for the banks is that they are growing much slower this year, especially in the top tier. The smaller banks have also been weighed down by lower margins and higher non-performing loans.”
Safaricom net profit for the six months to September grew by 23 per cent to Sh18.1 billion, suggesting its full-year profit will hit Sh36.5 billion.
Standard Investment Bank (SIB) says in its latest valuation update on Safaricom that the firm is on track to beat its earnings per share forecast of 80 cents, based on the growth of EPS in half one and an increase in subscriber numbers that outperformed expectations.
“This (growth) was driven by a 14.9 per cent year-on-year jump in customer numbers to 25.1 million,” said SIB in the valuation report by analysts Eric Musau and Faith Waitherero.