Safaricom's Market Valuation Drops By Sh20 Billion in One Week of NASA Boycott
The market valuation of giant mobile service provider Safaricom has reduced by Sh20 billion in the first week of opposition National Super Aliance's calls for boycott of its products, Business Daily reports.
Some analysts however said the political action by the opposition was unlikely to negatively affect the firm’s share price in the longer term and they expect the company to continue registering positive revenue growth.
“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,” Dyer & Blair head of research Linet Muriungi told Business Daily.
“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 further said that the announcement by Nasa will only lead to migration of the subscriber base that accounts for small value monthly credit usage rather than premium customers who contribute the lion’s share of Safaricom's revenue.
Exotix Capital analyst Tracy Kivunyu noted the political uncertainty in the country mostly affects M-Pesa compared to other Safaricom revenue streams, and warns it could become a source of discomfort for the telco if it persists.
“While we expect a recovery in M-Pesa in the second half of 2017/18, we remain cautious of the political uncertainty coupled with the ongoing 90-day boycott of Safaricom services announced by the National Resistance Movement [wing of Nasa],” said Ms Kivunyu in a report released earlier this week.
Comments (25)
Those are lies crafted by NASA aligned journalists to create an impression that the fake boycott is effective....
Raila TIBIM!!!
Ati:"While we expect a recovery in M-Pesa in the second half of 2017/18, we remain cautious of the political uncertainty coupled with the ongoing 90-day boycott of Safaricom services announced by the National Resistance Movement [wing of Nasa],” said Ms Kivunyu in a report released earlier this week.
FYI Ms. Kivunyu:NASAns' Boycott of Safaricom is NOT for 90 Days; it's for GOOD. Muache Kutupapasa na Kutudanganya Wakenya.
You are right @mteja. NASA has hired propagandists to spin all and anything that can make Kenya (read Uhuru) look bad. RAO is so desperate....wants Kenya to go up in flames...agitating Uhuru to make the slightest confrontation so he can fix him as the moron. DISAPPOINTED, RAILA IS, FOR UHURU IS NOT BITING THE BAIT... Him, Raila, is ending up looking like the immature liar, idiot he is.
Juvenile journalists. How I miss the good old days of Tom Mshindi and the likes
Mkenya. Stop your Psychological Warfare.
True....journalist for sale, cheap propaganda with no respect for facts. Where did old research go?
In one week???
Goddamn!
It is what it is.
.....celebration disguised as surprise.
Exactly. TIBIM!!!
Yes it is. TIBIM!!!
This is total crap,trust the fact that the senseless die hard followers of RAP withdrawing from safaricom is being blown out of proportion, they won't make any difference. .
This is just paper valuation loss. It doesn't matter in any way or form. It is a temporary event.
Sokora. Yours is Healing Music to Chris Kirubi. Good Luck! TIBIM!!!
Political climate contributed to this than the boycott. The also say PREMIUM customers who contribute the lion share are not going anywhere. This is only a temporary situation and besides Safaricom can withstand this very small bump without a hitch.
No, it is a fabrication by someone bankrolled by NASA. We know they never left Safaricom. Airtel doesn't work all over the country, and wherever it does, just weak..
So what's gonna happen to Airtel once the Jubilee supporters decide to start boycotting?
Airtel will be just fine.They know to keep their noses out of politics.Nasa represents atleast 40 ethnic groups even if only one seems to be the one blamed for all the ills of Jubilee. Over to you jubilee can you save this company that helped you win the election. The ball is officially in your court and they said this boycott was a waste of time.
Those are lies flat out journalist. Publish facts not propaganda. Shame on you mwakilishi. You are working for NASA. Go lie to your mother not kenyans
Just bought more SC shares. Prospect for growth cannot be better, those dropping the carrier form the largest percentage of customers who default on their phone bills. Go out and buy stocks. This is the time.
Robert. Shares and Revenue are 2 Different Things. Just like Economy is Different from Stocks. One is NOT the Other; and the Other is not One.
@Guest 1, stocks and revenue are not independent of each other.. when people buy stocks it means they have faith in that company and they expect that company to grow. On the other hand high revenue in a company can drive up the stock price of that company hence raising more money for the company...and I know thats what you don't want to hear with Safaricom but its not going anywhere. It's deeply rooted in Kenya..Raila aint so lucky, he is going to Bondo.
Mugi, thanks, you understand trade and stock exchange. Guest 1 has no clue what we're talking about.
"Be Fearful When Others Are Greedy and Greedy When Others Are Fearful" - Warren Buffet
Time to buy Safaricom shares....
Credulity is not a crime. Those that want to believe any sensational news disguised as facts are free to do so.