Safaricom Stock Hits 2017 High Ahead of Wednesday’s Earnings Release

Safaricom Ltd (SCOM) is coming in hot ahead of its full year earnings report on Wednesday 10th May.

On Friday’s trading session, the counter was trading between Sh 19.20 and a 2017 high of Sh 20.0 before closing the day at Sh 19.75 per share. In the same week, Safaricom was the biggest mover with 43.5 Milllion shares valued at Sh 856 Million; this represented 40.20% of last week’s traded valued.

The stock is up almost 24 percent over the last two months from a low of Sh 16, a price witnessed when investors got worried over a proposal to split the Telco from its mobile money platform M-Pesa. Interestingly, M-Pesa contributed 26.3% of the company’s total revenue as of the half year period released in November 2016.

However, Kenya’s Cabinet Secretary for ICT Joe Mucheru quelled some of those fears saying the Govt was against the splitting of M-Pesa from Safaricom.

Our view is that there’s a potential for the stock to soar even higher — if the firm can beat expectations, particularly on its data and SMS business and even surprise investors with an increase in dividend payout. Last week in an interview on Hot 96 FM, CEO Bob Collymore said the telco would be announcing great deals that day.

In their last investor briefing, the company said it would focus on innovation, improve customer experience, data business particularly delivering internet to homes in order to achieve sustained growth and attract more customers.

Investors are bullish about the potential for these initiatives, specifically the foreign investors who have been accumulating the stock over the last few months.

Beyond the numbers, Safaricom is likely to announce the official launch of M-Pesa card which will allows consumers to pay for goods and services at different points of sale across Kenya. Through this debit card, Safaricom wants to get a piece of the Sh 1.4 Trillion  in annual transactions in Kenya’s payment cards industry.