Key questions:
  1. What has resulted in Safaricom's declining share performance?
  2. From government interference to management problems, what is Safaricom’s share price outlook?

Safaricom PLC's share price significantly declined by 49.9% between September 2022 and November 2023. In the same period, the Nairobi Stock Exchange All Share Index (NASI), grappling with its challenges, also experienced a 30.9% decrease.

Safaricom, constituting 40.5% of the bourse market capitalisation, has raised concerns among investors. This shift in sentiment cannot be ignored, especially considering that Safaricom shares were the most attractive in the market until 2021, when a downward trend emerged.

 

 

The fall in share value can be attributed to a combination of factors, including government interference and the expansion into Ethiopia. Before delving into these factors, let's examine the overall company performance for the five years between FY2019 and FY2023.

Robust Financial Performance

Safaricom, a dominant player in the Kenyan telecommunications industry and the only listed firm has demonstrated exceptional growth in customer base, revenue, and net profit.

The company derives revenue from five main sources: voice, messaging, mobile