Safaricom sheds Sh20bn in week of Nasa boycott
FRIDAY, NOVEMBER 10, 2017 9:56 BY CHARLES MWANIKI
Telecoms operator Safaricom’s SCOM • 24.75 market valuation shed Sh20 billion in the first week of opposition coalition Nasa’s call on their supporters to boycott the firm’s services.
The marginal drop in the share price is seen to signal the resilience of the company, which accounts for nearly 40 per cent of trading at the Nairobi Securities Exchange (NSE), and to be a reflection of the fact that investors have yet to get enough information on the boycott’s potential to move the market in either direction.
Some analysts, however, insisted that the political action was unlikely to affect the company’s share price in the longer term, especially because they expect revenue growth to remain on course.
“There is only a small element of the boycott to Safaricom’s share price performance, attributable to investor sentiment. In our view, the slight drop is mainly due to a price correction after release of first half results, and precisely because the 9.5 per cent year-on-year profit growth was lower than anticipated,” said Dyer & Blair head of research Linet Muriungi.
“We may, however, see subscriber growth either stabilise or soften marginally in the short term, where the organic growth in subscriber numbers is offset by those leaving.”
Ms Muriungi said she did not expect a decline in service revenues because the migration is more likely to be in the subscriber base that accounts for low value monthly credit usage rather than among premium customers who account for the lion’s share of the service revenue....
http://www.businessdailyafrica.com/...s-Sh20bn-Nasa-boycott/539552-4180896-t6vil0z/
FRIDAY, NOVEMBER 10, 2017 9:56 BY CHARLES MWANIKI
Telecoms operator Safaricom’s SCOM • 24.75 market valuation shed Sh20 billion in the first week of opposition coalition Nasa’s call on their supporters to boycott the firm’s services.
The marginal drop in the share price is seen to signal the resilience of the company, which accounts for nearly 40 per cent of trading at the Nairobi Securities Exchange (NSE), and to be a reflection of the fact that investors have yet to get enough information on the boycott’s potential to move the market in either direction.
Some analysts, however, insisted that the political action was unlikely to affect the company’s share price in the longer term, especially because they expect revenue growth to remain on course.
“There is only a small element of the boycott to Safaricom’s share price performance, attributable to investor sentiment. In our view, the slight drop is mainly due to a price correction after release of first half results, and precisely because the 9.5 per cent year-on-year profit growth was lower than anticipated,” said Dyer & Blair head of research Linet Muriungi.
“We may, however, see subscriber growth either stabilise or soften marginally in the short term, where the organic growth in subscriber numbers is offset by those leaving.”
Ms Muriungi said she did not expect a decline in service revenues because the migration is more likely to be in the subscriber base that accounts for low value monthly credit usage rather than among premium customers who account for the lion’s share of the service revenue....
http://www.businessdailyafrica.com/...s-Sh20bn-Nasa-boycott/539552-4180896-t6vil0z/
