Safaricom claims the biggest Telco market shares in Kenya with massive subscription numbers. The giant telecom operator commanded a 63.6% market share between 2018 and 2020. The company is essentially the richest in Kenya, making its shares desirable. Hence, if you’re eyeing Safaricom shares, here is everything you need to know:
Safaricom was publicly listed on the Nairobi Securities Exchange (NSE) in 2008. Then, the public responded by oversubscribing the shares. The current shareholding structure comprises the Government of Kenya (35%), Vodacom (35%), free float (25%), and Vodafone (5%).
The 25% free float represents the shares currently listed on the NSE. These are the shares currently available for public purchase from the NSE.
How to Earn from the Shares
After acquiring shares from Safaricom, you can earn in two ways:
- Dividends: Dividends are profit distributions to company shareholders in the form of stock reinvestment, cash, etc. The board of directors makes dividend decisions that shareholders then approve. The dividend you get is dependent on the shares you have. However, the dividend is often not guaranteed since it relies on company profits. Safaricom’s dividend in 2022 is Sh0.75 per share.
- Selling back your shares: Reselling your shares at a higher price is also a viable option. You can do this via a stockbroker. However, selling all your shares deprives you of Safaricom dividends. Hence, if you have to sell your shares, sell only a fraction of them.
What You Need to Buy Safaricom Shares
You will need capital before you even think of buying any shares. Consequently, you should know the price of Safaricom shares and any additional costs. As of this writing, Safaricom shares price is Sh29.50.
The market conditions dictate Safaricom shares selling price today. Hence, the price may be different for tomorrow or any other day. Also, note that you cannot buy a single share. Safaricom shares can only be bought in batches of 100.
A CDS Account
Every Kenyan investor needs to have a Central Deposit and Settlement account. A CDS account will store all your shares and can be opened at no cost.
You need your passport/ID copy, two passport-size photos (colored), and a KRA pin to open a CDS account. You will then be assigned a CDS number if the process is successful.
How to Buy Safaricom Shares
Buy Safaricom shares can go one of three ways: via a licensed stockbroker or bank, using online means, or via Bonga Point.
A Licensed Stockbroker
Stockbrokers are professionals who perform in-depth market research and analyses of stock markets. Stockbrokers can be commercial banks, brokerage firms, or investment banks.
Stockbrokers give you leverage over other investors by offering expert advice on when to purchase or sell your Safaricom shares, among other stock market-related issues. In addition, they perform the trade on your behalf.
You need to open an account with an NSE-licensed stockbroker to purchase shares. The stockbroker also acts as your custodian. This means that they buy and hold the shares on your behalf. The shares are held in your CDS account.
However, you should consider several factors, like the fees charged and online trading provision services when selecting a stockbroker.
How to Buy Safaricom Shares in Kenya Using a Stockbroker
- Inform your stockbroker or bank that you intend to deposit money in your CDS account. Your stockbroker guides you through the process.
- You can make payments via MPESA Pay Bill or your bank account. Note that Safaricom shares are bought in multiples of 100 shares. Thus, you can only buy a minimum of 100 shares.
- Fill in the bank’s order form, which your stockbroker or bank executes.
- Your Safaricom shares will be reflected in your CDS account in two days.
Using Online Means
If you find going to your stockbroker a tedious task, then you will find the online means reliable, available, and convenient. Instant payment methods like mobile bank transfers and Mpesa make this method even simpler.
How to Buy Safaricom Shares Online
- Download an online trading application, like FXPesa, Faida Investment Bank, etc., on your mobile device or PC.
- Create an account or log in and fund your account via Mpesa or bank transfer.
- Find the link for buying Nairobi Stock Exchange Safaricom shares. Click on ‘buy shares.’
- Choose the amount of Safaricom shares you intend to purchase. Confirm the order.
- Your Safaricom shares reflect on your CDS account within two days.
How to Buy Safaricom Shares in Kenya using Bonga Points
Bonga points’ utility has grown over the years. You can now purchase Safaricom shares using Bonga points if you have enough to buy a minimum of 100 shares. Note that 5 Bonga points will represent sh1 in this case.
This is how you go about it:
- Dial the USSD code *126# on your dial pad. Press call.
- Select “Lipa na bonga points” option. Press Send.
- Select the “Paybill” option and press send.
- Enter the business number that belongs to your stockbroker. Press Send.
- When prompted, please enter your CDS account number.
- To complete the transaction, enter the amount of money you intend to invest
How to check my Safaricom shares online? CDSC introduced an alert SMS service for investors to gain 24/7 access to their CDS accounts. It will allow you to keep track of your portfolio on your devices anytime.
To enable the alert SMS service, send the word “Register” to 22372. Follow the instructions to complete the registration process. However, every SMS will cost you Sh10.
Benefits of Buying Safaricom Shares
- You become eligible for the dividends paid to shareholders.
- Your share value is likely to go up when the company performs well. This means that you can sell your shares at a profit.
- You can use your Safaricom shares when applying for a loan.
- Safaricom shares have high liquidity. Hence, you can cash in and out when needed.
Purchasing Safaricom shares may just be one of the best investment decisions you’ll make this year. This is especially because the company’s reputation precedes its name. However, it is advised that you do your due diligence before making investment decisions.