Shares in the region’s most profitable firm, Safaricom, have plunged past the level at which the public bought them when they were floated; -- closing Tuesday Aug 12 trading at just 15 cents above the IPO price of 5 shillings.
However; -- the counter changed hands at between 5.50 and 4.95 per share. According to Aly Khan Satchu, an equities trader; -- the fundamentals of the company are still compelling.
Safaricom’s CFO, Les Baille, is on record as saying that even though its market-share’s expected to erode; -- pre-tax profits should keep rising “for the foreseeable future.”
From its June 9 listing; -- Safaricom slammed into a high of 8 shillings per share. Since then however; -- its been a long, slow retreat to its present levels, and those who are taking the biggest beating, are the Kenyans who took loans to buy shares in Safaricom.
On the other hand of the equation; -- if you did not buy during the IPO, and you're looking at something you can haul off in the medium-long run....rub your hands in glee and ready the arsenal to buy.Just remember...no margin loans should be taken this time round.
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