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VENTURES AFRICA – Shares of leading East African Telecoms company Safaricom on Tuesday sold for a record Sh11.10 (13 cents) at the Nairobi Securities Exchange (NSE) as 53 million units were sold, accounting for two-thirds of the day’s volume driving the market’s cap to Sh1.98 trillion ($22.8 billion).
Business Daily reported foreign investors cashing out on the profitable stock as it doubled its 2008 listing value of Sh5 (6 cents) attributed to the massive transaction volume.
“Safaricom was the day’s top mover with foreigners selling off the counter on profit taking and local investors accounting for the bulk of demand,” the report quoted a Standard Investment Bank analysis as saying.
According to Mr Kuria Kamau, an analyst with Kestrel Capital, a brokerage firm based in Nairobi, the “share price is attractively valued at current levels relative to regional comparables.”
On the contrary, analysts have argued Safaricom’s share is overpriced using a comparison of valuations of other African and Middle East telecom companies with that of the M-Pesa service provider. Old Mutual Securities, for example, have put a maximum fair price of Sh10.21 for the shares, Business Daily said.
Safaricom, partly (40%) owned by Vodafone, is a leading telecom operator based in Kenya and owner of the world leading mobile money payment service M-Pesa.
Earlier in the month it recorded a Sh11.2 billion ($131 million) h1 profit-after-tax, the highest in Kenyan corporate history.