Due to the exodus of foreign investors following rate increases in the US, Safaricom’s valuation at the Nairobi Stock Exchange has fallen below the Sh1 trillion threshold.
The telco’s share price dropped to Sh24.45 from a high of Sh38. 15 at the beginning of the year, amounting to a paper loss of Sh548.9 billion over that time. As a result, the company valued at Sh979.60 billion.
Safaricom, the most profitable corporation in the nation, contributed 82% of the NSE paper loss of Sh662 billion in 2022; demonstrating the difficulty investors have evaluating the performance of the exchange due to Safaricom’s dominance.
After a rise in interest rates in established countries like the U.S. Where strong inflation has compelled their central banks to raise rates; the FTSE is being pushed down by a decreased enthusiasm for emerging markets.
Due to this capital flight to the US market, where inflation is at multi-year highs, blue-chip companies like Safaricom, Equity Group, and East Africa Breweries Limited (EABL), which are popular with international investors, have seen their share prices decline.