Safaricom's share price on Monday jumped 5.7 per cent to a new all-time high on investors' demand following news that the telco’s consortium had won the bid to operate in Ethiopia.
The telco’s share closed Monday trading at Sh41.75 from Sh39.5 last week Friday, raising its valuation to Sh1.672 trillion or 62.3 per cent of Nairobi Securities Exchange market capitalisation.
Government officials in Ethiopia announced Saturday morning that the Safaricom-led consortium—which also includes Vodacom and Vodafone—won through a Sh91.8 billion ($850 million) bid.
The news drove investors' interest leading to increased activity that saw the share hit a peak of Sh42 on intra-day trading.
“The rise was mainly driven by the news of entry into Ethiopia since investors see this as another opportunity for the telco to grow revenues,” said Sarah Wanga, AIB-AXYS Africa head of research.
The licence gives Safaricom entry into the Horn of Africa country that represents a market of 108 million people and about 50 million phone subscribers.
Late April news that a consortium led by Safaricom and another one by South Africa’s MTN Group were the only parties to make bids in the auction for two operating licences had already triggered excitement on Safaricom share.
