Safaricom of Kenya Rises to 18-Month High on Dividend Payment

Safaricom Ltd. (SAFCOM), East Africa’s biggest mobile-phone operator, advanced to its highest in more than 18 months ahead of book closure for a dividend payment.

The stock climbed 4.9 percent to close at 4.25 shillings, the strongest level since Feb. 22, 2011, in Nairobi, the capital.

Safaricom raised its dividend by 10 percent to 0.22 shillings, the company said on May 10. Book closure for the dividend is on Sept. 13.

“The recent development in mobile termination rate which will not be implemented as earlier planned has also boosted the stocks,” Eric Musau , a research analyst at Nairobi-based Standard Investment Bank Ltd., said by phone today.

President Mwai Kibaki issued a directive to the industry regulator, the Communication Commission of Kenya, not to change the mobile termination rate until a fresh study of the same is carried out, Business Daily reported on Aug 28. Kenya mobile operators had on May 29 struck a deal that was to see the MTR fall to 1.60 shilling per minute on July 1 from the current 2.21 shillings. MTR is the fee mobile operators pay one another for handling calls originating from a rival network.

African Alliance securities raised its price estimate on Safaricom stock to 3.75 shillings from 3.15 shillings, it said Aug. 30.

To contact the reporter on this story: Johnstone Ole Turana in Nairobi at jturana@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.