- A spot check on MyStocks at noon showed the telco's share dropping further, with market analysts indicating it could nosedive to Sh20 levels by Friday
- The drop in Safaricom's share price is coming less than two months after it hit an all time high of Sh33.50 on January 20
Safaricom Plc's share price on Monday dropped eight per cent by noon, trading at Sh26.35, the lowest level since last May when it sunk to Sh26.80.
A spot check on MyStocks at noon showed the telco's share dropping further, with market analysts indicating it could nosedive to Sh20 levels by Friday as global economies shut on coronavirus menace.
''A 30 per cent oil price crash has really spooked the market, amidst surging Coronavirus cases and entire economies shutting down. Safaricom could fall to Sh20 levels this week,'' Coast-based financial risk analyst Mihr Thakar told the Star.
Alykhan Satchu, on the other hand, attributed the sharp drop on a high correlation with international markets.
The rapid drop in Safaricom, which holds over 50 per cent of activities at the Nairobi Securities Exchange (NSE) is likely to negatively affect the bourse's performance, ruining buoyant results recorded for the week ended Friday last week.
According to a weekly bulletin by the Central Bank f Kenya, the number of shares traded and equity turnover at the NSE last week rose by 63.3 per cent and 73.6 per cent, respectively
All the share price indices increased, with the NSE 25 share price index increasing by 3.2 per cent. Similarly, market capitalization rose by 3.6 per cent.
The International Monetary fund (IMF)Coronavirus now registered in almost 100 countries with over 100,000 infections confirmed globally and 3500 deaths has been cited among three major uncertainties to the global economy.
Over the weekend, the number of shares traded and equity turnover at the Nairobi Securities Exchange rose by 63.3 per cent and 73.6 per cent, respectively
All the share price induces increased, with the NSE 25 share price index increasing by 3.2 per cent. Similarly, market capitalization rose by 3.6 per cent.
Over the weekend, the International Monetary Fund (IMF) availed $50 billion (Sh5 trillion) through its rapid-disbursing emergency financing facilities for low income and emerging market countries that could potentially seek support.
Of this, $10 billion (Sh1 trillion) was availed at zero interest for the poorest members through the Rapid Credit Facility.
The drop in Safaricom's share price is coming less than two months after it hit an all-time high of Sh33.50 on January 20, with experts predicting even better fortunes as its service revenues surge on digitization and business process engineering.
SBG Securities had seen Safaricom's earnings per share grow by 18 per cent, as the service revenue jumps by seven per cent.
The broker projected service revenues from M-Pesa to grow by 13 per cent compounded rate for the next three years.
The fever at Safaricom's counter spread the impact to top five counters at the Nairobi bourse, with KCB Group dropping 7.46 per cent, East Africa Breweries Limited (EABL) 6.14 per cent and Co-op Bank 5.41 per cent.