Safaricom pulls NSE to 20-month low, sheds Sh40b

Safaricom share yesterday shed Sh40 billion to pull the combined wealth of investors at the Nairobi Securities Exchange (NSE) to levels last seen 20 months ago.

The telco’s share closed the day at Sh29.45, having shed one shilling from the previous day trading, coming on the back of a reported drop in full-year results for the period ended March 2022.

At Sh29.45, Safaricom is at levels last seen in September 2020 and has pulled down the combined wealth of investors on the NSE to Sh2.14 trillion amid sustained sell-off by foreigners. The NSE was last at Sh2.14 trillion some 20 months ago on September 4, 2020 at the time investors were still grappling with rising Covid-19 disruptions.

Safaricom on Thursday reported a 1.7 per cent drop in profit after tax to Sh67.49 billion for the year ending March 2022 weighed down by Ethiopia entry costs and increased tax.

The telco’s share was trading at Sh35 on April 19 meaning that it has now shed the value of investor’s wealth by Sh222.36 billion in a month.

All the other four counters—KCB, Equity, Cooperative Bank and East African Breweries—which together with Safaricom make up over 70 per cent of NSE wealth were also on losing streaks.

EABL shed Sh2.50 while KCB, Equity and Co-op shed Sh0.55, Sh0.40 and Sh0.25 to further pull down the NSE. Safaricom share which was yesterday accounting for 55.2 per cent of the entire NSE wealth and continues to dictate the direction of the market.

For instance, of the Sh48.29 billion that the NSE shed yesterday, other counters accounted for Sh8.29 billion. AIB-AXYS Africa data showed foreign investor net selling at the NSE was Sh259 million yesterday compared with Sh112 million the previous day.

Safaricom saw foreign sales worth Sh198.3 million while foreign buying was Sh7.7 million.