Local individuals are being forced to sell their shares at Safaricom Limited PLC., by foreign investors and local companies, contrary to the government’s objective of boosting Kenyan retail investors’ stake in the country’s biggest telco.
The latest regulatory filings show that domestic investors, including citizens from neighbouring East African countries, now hold 1.5 billion units of the telco’s stock which is only a 3.8pc stake.
This means there was a 68.6pc shrinkage from the 4.8 billion shares or 11.9pc stake that the domestic investors had acquired on June 9, 2008 when the Nairobi Securities Exchange-listed firm went public through an initial public offering (IPO).
On the other hand, Foreign investors including asset managers like BlackRock, JPMorgan and Fidelity have more than doubled their combined stake to 10.9pc up from 5pc percent over the same period.
Also constantly buying into the telco are local institutional investors such as insurers and the National Social Security Fund (NSSF).
Retail investors have been most hit. Data shows they are the net sellers of Safaricom shares since the telco hit the stock market, over 250,000 retail investors exited before and midway through the telco’s long-term stock rally which gained momentum from December 2012, foregoing gains of more than Sh80 billion, excluding dividends.
Besides capital gains, those who sold their shares in the early years have missed out on lucrative dividends that Safaricom has paid.
The stake held by individuals is expected to continue dropping going forward as local and foreign institutional investors gather more assets and deploy them in buying Safaricom and other stocks.
This is because Safaricom has become a must-have stock for most local and institutional investors who nowadays transact trades in the telco’s shares worth billions of shillings per day.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]