Dar bil­lion­aires now top in­vestors in Sa­fari­com

Au­nali and Sa­j­jad Ra­ja­bali bought an ad­di­tional 11 mil­lion shares, rais­ing their port­fo­lio to 21.1m

Business Daily (Kenya) - - FRONT PAGE - Au­nali Ra­ja­bali, Tan­za­nian in­vestor. Vic­tor Juma vjuma@ke­na­tion­media.com

Tan­za­nian bil­lion­aires Au­nali and Sa­j­jad Ra­ja­bali have be­come the top in­di­vid­ual in­vestors in Kenya's gi­ant tele­com op­er­a­tor Sa­fari­com af­ter they bought an ad­di­tional 11 mil­lion units worth Sh277 mil­lion.

The Au­gust reg­u­la­tory fil­ings at the Nairobi Se­cu­ri­ties Ex­change (NSE) show that the Ra­ja­balis, who bought 10 mil­lion shares in April, now hold a to­tal of 21.1 mil­lion shares val­ued at Sh527 mil­lion.

This has ef­fec­tively rel­e­gated bil­lion­aire in­vestors Ram­aben Pa­tel (with 19.4 mil­lion shares worth Sh485 mil­lion) and John Ki­bunga Ki­mani (12.1 mil­lion units val­ued at Sh302 mil­lion) to sec­ond and third places re­spec­tively.


Ra­ja­balis’ ac­cu­mu­la­tion of Sa­fari­com shares, seen as a sig­nal of their con­fi­dence in the telco’s fu­ture prospects, comes amid a ma­jor dip in the com­pany’s share price, which now stands at Sh25 --- a 23.6 per cent drop from a high of Sh32.75 in April.

Other listed firms have also recorded sig­nif­i­cant share price de­clines, with the bench­mark NSE 20 Share In­dex re­ced­ing to the bear trough seen in Jan­uary last year.

The Ra­ja­balis have been ac­cu­mu­lat­ing shares in Nse-listed firms over the past two years, with their cu­mu­la­tive in­vest­ment now stand­ing at more than Sh1.8 bil­lion.

Be­sides Sa­fari­com, the duo has bought sig­nif­i­cant stakes in Eq­uity Group, Kenolko­bil and I & M Hold­ings, among other listed firms.

Sa­fari­com is Kenya's most prof­itable com­pany, with a dom­i­nance in the var­i­ous seg­ments of the telecom­mu­ni­ca­tions mar­ket, in­clud­ing voice, mo­bile data and mo­bile cash trans­fers. =an­a­lysts say the at­trac­tive­ness of Sa­fari­com go­ing for­ward will de­pend on the scope and in­ten­sity of pro­posed reg­u­la­tions on mar­ket dom­i­nance and com­pe­ti­tion.

Sa­fari­com made a net profit of Sh55.2 bil­lion in the year ended March, a 14.1 per cent rise from Sh48.4 bil­lion the year be­fore. The com­pany de­clared a div­i­dend of Sh1.1 per share or a to­tal of Sh44 bil­lion, rep­re­sent­ing an 80 per cent pay­out.

The telco’s gen­er­ous div­i­dend dis­tri­bu­tion has been sup­ported by min­i­mal debt, with the com­pany fund­ing its heavy cap­i­tal ex­pen­di­ture from in­ter­nally gen­er­ated cash. The big­gest un­cer­tainty about Sa­fari­com’s fu­ture per­for­mance is seen aris­ing from new reg­u­la­tory ac­tions. The gov­ern­ment last week also in­tro­duced higher taxes on telecom­mu­ni­ca­tion ser­vices, a move that is ex­pected to lead to higher prices and dis­cour­age us­age.= Ex­cise duty on mo­bile calls and data rose to 15 per cent from the pre­vi­ous 10 per cent.

The telcos could also suf­fer lower mar­gins should they de­cide to ab­sorb the ex­tra taxes in­stead of pass­ing them on to con­sumers. “Im­pact on telcos could be ma­te­rial — es­pe­cially for voice rev­enue but a pric­ing strat­egy trad­ing off rev­enue and vol­ume may mit­i­gate the net im­pact,” Stan­dard In­vest­ment Bank (SIB) said in a re­search note.

The gov­ern­ment plans to raise some Sh14 bil­lion in the fis­cal year end­ing June 2019 from ex­cise taxes on telecom­mu­ni­ca­tion and bank ser­vices, among oth­ers.




GROWTH A Sa­fari­com cus­tomer care cen­ter in Nairobi

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