Safaricom Shares at NSE Drop to Record Low of KSh 24 as US Rates Hike – Tuko.co.ke
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Safaricom shares have dropped to a record low for the first time on the Nairobi Securities Exchange (NSE).
The telecommunication firm's shares traded at KSh 24.45 per share, down from KSh 38.15 on Tuesday, October 4.
This saw the telco's value drop below KSh 1 trillion mark to KSh 979.6 billion at the Nairobi bourse.
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According to Business Daily, the value of the NSE dropped with market capitalisation plunging below KSh 2 trillion mark due to the telco's poor performance.
Safaricom recorded a paper loss of KSh 548.9 billion, which accounts for 82% of the KSh 662 billion NSE loss since the start of the year.
The plunge in the value of the bourse came about following a jump in interest rates by developed countries like the US.
President Joe Biden's administration adjusted the interest rate upwards following the rise in inflation.
US Central Bank increased the base interest rate to a range of about 3% and 3.25% in September 2022.
This adversely affected smaller markets like the NSE, with its blue-chip firms like Safaricom falling in value.
Safaricom dominance at the bourse dropped to 49%, down from 63%, after net foreign investor outflow at the NSE dropped to KSh 589.5 million from KSh 822.79 million.
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Sugar Prices Hit Record High as Kenya’s Inflation Surges to 9.2% in September 2022
This came even as Kenya's inflation hit a record high of 9.2% in September 2022 due to increased food and fuel prices.
The prices of basic food items increased by 15.5%, and pump prices rose by 11.7%, according to the Kenya National Bureau of Statistics (KNBS).
The Central Bank of Kenya (CBK) increased the base lending rate following the rising inflation.
In September 2022, CBK Monetary Policy Committee (MPC) raised the interest rate from 7.5% to 8.5%.
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Source: TUKO.co.ke
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