Safaricom shares price is among the best performing in the stock market. This has remained so for the past few years making Safaricom among the best company stocks to invest in.
Some of the reasons driving this performance are mainly because Safaricom is the largest company in the east and central Africa both in market valuation and profitability.
This is tremendous growth for a company that went public 15 years ago. This success story of Safaricom has attracted investors to the company both at the retail and corporate levels.
As a Kenyan company, Safaricom shares are traded on the Nairobi Securities exchange. You qualify to invest in Safaricom shares as long as you meet the set requirements. See the guideline on how to buy Safaricom shares.
Since the IPO in 2007, Safaricom shares price continues to grow with investors benefitting both from the share price gain and regular dividends.
Most analysts predict that Safaricom shares price growth will continue at least in the near future as long as the momentum remains.
Let’s review some of the reasons why Safaricom shares price is set to rise in the future.
1. Market dominance
There is no doubt Safaricom dominates the telecommunication industry in the country. This happens almost across all areas including mobile money, internet services, and communication services.
This lead gives it an advantage that is likely to continue deep into the future. The huge market share is a catalyst for growth as the Kenyan population expands and the economy grows.
Sustained growth will likely have a positive impact on the Safaricom shares price rise in the future. Although there have been complaints of this dominance both by the competitors and some sections of the government, the chances of this status changing remain minimal.
The telecommunications industry is at the core of future growth and development.
2. Past performance
For the last 15 years, Safaricom’s performance has always exceeded market expectations even during a crisis such as Covid 19.
The saying that history dictates the future is very ideal in this case when discussing Safaricom shares price. As long as both the macro and the micro environments remain stable, all indicators point to a consistent growth at least in the immediate future.
As an investor, understanding past performance is among your key duties to help inform on future decision making. Using this analysis, the chances of Safaricom’s share price rising remain high.
To analyze the past performance, you should consider checking the financial statements that are always publicly available.
Some of the key areas to check to include the customer base, asset base, and profitability. Consistent growth in these areas indicates a company that is performing well.
3. Regional expansion
For a long time, Safaricom has always concentrated on the local market. However, this is starting to change with the recent actions indicating the company is beginning to grow its regional footprint.
Recently, the company got its first regional license after the Ethiopian government gave it the go-ahead to launch operations in the country.
This entry into a country with over 100 million people is being termed a game-changer by most analysts. If the venture succeeds, it could propel the company to higher growth.
Although it is yet to start operations, there is optimism in the market this strategic move could cause Safaricom’s shares price to rise.
Some of the factors informing this expectation are that Ethiopia is currently underserved in mobile money services. A product that Safaricom wants to focus on.
M-PESA continues to be a key revenue driver for the company as more people embrace it. Currently, almost half of Kenya’s GDP passes through M-PESA annually making it the single most important money channel not only for Safaricom but also for the country.
Through M-PESA, other innovations have emerged such as lending solutions that are also gaining a lot of market demand helping to grow the revenue even more.
With such a good standing and market dominance, M-PESA will remain among the top value drivers for the company. A factor that also has a positive impact on the Safaricom shares price.
Expansion into Ethiopia is also meant to start exposing M-PESA to the regional markets.
These are some of the key factors that could be fundamental in the Safaricom shares price growth in the future.