Safaricom touches new high of Sh21 as investors eye dividend payout

What you need to know:

  • Stocks gain value as they approach the date of book closure for dividends and bonus issues as investors looking to book these payments rush to take a position.
  • On the same day Safaricom gained 75 cents, giving it a Sh30-billion jump in valuation that helped push the total NSE market capitalisation to Sh2.114 trillion from Sh2.079 trillion on Monday, while the NSE 20 share index was up 39 points to close at 3485.

Safaricom’s share closed at a new all-time high of Sh21 yesterday on the Nairobi Securities Exchange (NSE), three weeks before its books close on a dividend totalling Sh1.44 a share.

The company now carries a valuation of Sh841 billion in terms of market capitalisation, a Sh188 billion gain since the beginning of the year when its stock was trading at Sh16.30.

It traded at an intra-day high of Sh21.50 yesterday.

Investors are rushing to buy the stock to pocket the total dividend of Sh1.44 per share, which consists of the final dividend of 76 cents declared for the financial year ending March, and a 68 cent interim dividend to be paid for the financial year ending March 2017.

Bear run

The books for both dividends are closing on September 2, and they will be paid on December 1. Safaricom has gained 16 per cent, equivalent to Sh2.90 per share, since the announcement of the special or interim dividend on July 26.

Stocks gain value as they approach the date of book closure for dividends and bonus issues as investors looking to book these payments rush to take a position.

The share’s year-to-date gain stands at 29 per cent, making it the best performing stock on the NSE this year.  

It therefore stands out as one of only seven counters in the market with a gain this year amid a general bear run that has seen 41 stocks plummet by double digits.

Safaricom traded 6.35 million shares yesterday. Equity turnover doubled to Sh595 million from Sh264 million, while the number of shares traded rose to 24.4 million from 11.5 million.

On the same day Safaricom gained 75 cents, giving it a Sh30-billion jump in valuation that helped push the total NSE market capitalisation to Sh2.114 trillion from Sh2.079 trillion on Monday, while the NSE 20 share index was up 39 points to close at 3485.

Unchanged prices

The other large cap counters registered minimal or no price movements in what was a benign market other than the Safaricom share price gain.

East African Breweries was unchanged at Sh271 per share, even as it traded a significant volume of 264,400 shares, while Equity Bank gained 25 cents to Sh32.50.

KCB and BAT ended the day at unchanged prices of Sh32.50 and Sh857 respectively, with BAT not traded at all.

Among the smaller counters, the leading gainers were WPP ScanGroup at 9.3 per cent to Sh16.40, Kenya Re at 7.1 per cent to Sh21.25 and Kapchorua Tea which was up 6.7 per cent to Sh80.

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