Following the withdrawal of domestic shareholders and foreign investors, local institutional investors have purchased Safaricom shares worth Ksh9.55 billion, negating the government’s intention to increase the participation of Kenyan retail investors in the firm.
The Capital Markets Authority (CMA) regulatory filings reveal that local institutional investors, such as insurance companies and pension plans, purchased 340.7 million shares between August 2020 and July 2022.
Following the sale of 37.4 million shares by domestic investors and 305.4 million shares by foreign fund managers, which occurred after the telecom operator’s debut in 2008, both parties continued to sell their holdings.
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According to July regulatory filings, domestic investors, including residents of East African nations, currently possess 1.51 billion shares of the telco or 3.79 percent of the company.
Over the same time period, foreign investors, notably asset managers like BlackRock, JPMorgan, and Fidelity, increased their aggregate holding to 10.17 percent from five percent.
On Friday, August 26, 2022, it accounted for 70.9 percent equivalent to 4.55 million of the 6.42 million shares that exchanged hands at the Nairobi Bourse.
With the exception of the Treasury, Vodafone, or Vodacom, local institutional investors increased their holding from 6.62 percent in May 2013 to 11.1 percent in July, valued at Ksh124.7 billion.
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With an eye on dividends and capital gains, the share has fallen from Ksh44.65 in August 2021 to Friday’s closing price of Ksh28.05. 52 percent of the value of the entire stock market is represented by Safaricom shares.
The Kenyan government sold 10 billion shares, a 25% ownership in the telco, to individuals, local businesses, and foreign investors in order to raise Ksh50 billion from the Initial Public Offering (IPO).
Retail investors paid a total of Ksh24 billion for the shares, which, if they had held onto them all up to this point, would now be worth Ksh134.6 billion on the market.
However, throughout the years, the investors have sold 3.2 billion shares in total, leaving them with 1.5 billion units, which are now worth Ksh42 billion.
Over half a trillion shillings in cash distributions have been made by the telco overall during its time as a publicly traded company. As they proceeded to amass Safaricom’s shares, several individual investors, including billionaires, reaped the greatest rewards.
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