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The Safaricom stock hit a high of Sh37 last week on intra-day trading, a gain from opening price at Sh34.25 on January 4, with foreign investors continuing to turn as net buyers.
Genghis Capital research analyst Gerald Muriuki attributed the gain on the high interest held by the investors on tech stocks and the expected rebound in revenue growth on M-Pesa business.
“The interest is pushed by the general sentiment around the tech stocks,” Mr Muriuki said.
‘’There is also the anticipation of long-term performance of its mobile money platform, M-Pesa despite the slashing of the transaction charges.”
Data from AIB-AXYS Africa Capital shows foreign investors bought Sh2.098 billion worth of Safaricom shares in the first two weeks of New Year trading that closed last Friday.
This is in contrast with the Sh1.25 billion value of shares sold in the review period, meaning that foreign investors have accumulated an additional Sh839 million of Safaricom shares in 10 days.
Over the review period, total net foreign investor buying was at Sh527 million, meaning that while the foreigners were dumping some of the NSE stocks, they were accumulating their holding at Safaricom.
The share gain has helped lift the benchmark NSE 20 Index, which tracks the performance of select blue chip stocks like Safaricom and East Africa Breweries Limited (EABL), by more than three percent.
The NSE total market capitalisation is now at Sh2.42 trillion — the highest in over 11 months — lifted by Safaricom.
While M-Pesa revenue dipped by 14.5 percent to Sh35.89 billion on free transactions, the transaction volumes grew by 14.9 percent to 5.12 billion in the half year ended September.
Safaricom is banking on the increased number of users on its mobile money platform amid the running charges to raise revenue.
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