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NSE: Safaricom evaluated at more than the next nine companies merged

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Valued at 719 billion, Safaricom’s market evaluation is 9 times worth more than the next 9 companies combined.  KenGen, EABL , BAT Kenya, Barclays Bank, Standard Chartered, Bamburi Cement, KCB, Equity Bank and Cooperative Bank

The top 10 firms account for more than 70 percent of the total capitalization of the market which stands at KSh1.79 Trillion. According to Market analysts, this skewed distribution only leaves a few counters for large volume trade for institutional investors to trade.

The situation has been worsened by the fact that the NSE does not attract big listings which would have the effect of increasing the pool of large firms thus more investors and more diversified trade in the market.

According to Linet Murugi, the head of research for Dyer and Blair Investment Bank, “If you take a look at the equities market as it at the moment, trading activity has been skewed; about 10 counters account for more than 80% of the trading volumes and market capitalization out of 66 listings. This in itself is a market aberration.”

Share Price

Of all the 9 companies, only BAT registered an overall gain in the price of shares for the past one year. The rest have lost 13-37 percent over the same period. This has contributed to the rise of Safaricom as equal to the next 9 companies. During the same period last year, the company’s value was only equal to the next 4 companies.  

The second largest company is EABL valued at 100 billion. No other publicly listed company  has hit the 100 billion mark with Equity bank holding Number 3 at Sh97 billion, BAT (Sh85 Billion), KCB (81.3 Billion) Standard Chartered( Sh61 billion), Co-operative bank (Sh 59.2 Billion. Bamburi (Sh 56.3 Billion) Barclays (KSh 44.3 Billion) and Kengen at number 10 with Sh 35.3 Billion

Safaricom is the largest communication company in Kenya and has seen a 10.5 percent growth in its share price in the past one year with pre tax profits for a period of  6 months ending September 2015 hitting 34.5 billion and its revenue hitting the 100 billion mark; the first company in Kenya to hit the mark at 102 billion.

The main company’s business is centered on Mobile money transfer with its MPESA platform bringing a cool 25.9 billion in revenue for the company. Mobile data has also shown exponential growth to bring in 11.88 billion for the same period.  

What is your opinion on the topic?
Melissa Daniels
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