Why Safaricom shares rose today

Why Safaricom shares rose today

By Nairobi Stocks Review

Safaricom shares gained more than 2% today to close at Ksh42.10. About 3.3 million shares were traded, making Safaricom the most active stock on the Nairobi Securities Exchange.

The jump in Safaricom shares followed a Business Daily report stating that the company may be allowed to offer Mpesa services in Ethiopia in a major boost to its international expansion. The newspaper attributed its report to the director-general of Ethiopian Communications Authority.


Safaricom gearing up to enter Ethiopia

The Ethiopian government in May 2021 granted Safaricom a licence to offer telecom services in the country. That licence did not include approval to offer mobile financial services, which meant Safaricom could not take Mpesa to Ethiopia. But the country’s telecom regulator now says Safaricom will have a chance to provide mobile money services.

Safaricom is preparing to begin operations in Ethiopia in 2022. It paid almost Ksh100 billion for the licence to operate in the country. Ethiopia has more than 110 million people and many of them lack bank accounts, implying a huge growth potential for Safaricom’s Mpesa business.

Mpesa enables people to send and receive money on their phone. It can also be used to pay bills and make purchases online and in-store. Additionally, Mpesa offers savings and credit products to customers.

Mpesa has become an important business for Safaricom as the company seeks to unlock new growth opportunities outside its traditional telecom market. The company also offers internet services as part of the business diversification efforts.


Is Safaricom profitable and does it pay dividends?

Safaricom ranks among the most profitable companies in Kenya. It made a profit of Ksh69 billion in its latest financial year ended March 2021. The company has paid dividends consistently since its IPO. Its next dividend date is August 31, when it plans to distribute a dividend of Ksh0.92 per share.

It previously paid an interim dividend of Ksh0.45 per share in March. Therefore, its full dividend per share for the 2021 financial year is set to be Ksh1.37. You must have been a Safaricom shareholder by July 30 to qualify for the coming dividend payout.


How to buy Safaricom shares

You become a Safaricom shareholder if you own shares in the company. If you want to buy Safaricom shares, you will need to have a CDS account for stock trading. You can open the account with a stockbroker or your bank. (Read How to choose the best stockbroker).

Once you open the account, you will need to fund it – which means making money available to buy the shares you want. You can then proceed to place your order for Safaricom shares. Remember you must buy at least 100 shares when making a purchase.

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