Kenyans Set to Easily Trade Safaricom Stocks on NSE as CDSC Secures 16 Billion Shares

  • The Central Depository and Settlement Corporation (CDSC) declared the immobilization of 16 billion Safaricom shares.
  • The total number of Safaricom PLC shares available in electronic form has increased to 40 billion, up from 24 billion shares.
  • The CDSC mentioned that this change will facilitate easier trading of Safaricom PLC stocks at the Nairobi Securities Exchange (NSE).

Wycliffe Musalia boasts more than six years of expertise in areas such as finance, commerce, tech, climate, and health journalism, offering profound understanding of both Kenya’s and international economic patterns. At present, he serves as a business editor for Smart Tecno.co.ke.

Nairobi, Kenya - Residents of Kenya can now effortlessly exchange 40 billion shares of Safaricom PLC at the Nairobi Securities Exchange (NSE).

The Central Depository and Settlement Corporation (CDSC) reported the successful immobilization of 16 billion Safaricom PLC shares owned by Vodafone Limited.

The CDSC stated that the overall count of electronically held shares for the prominent telecommunications company has risen to 40 billion, up from the earlier figure of 24 billion shares.

What does share immobilization mean?

As stated by the Capital Markets Authority (CMA), immobilising shares refers to the process of transferring taxable shares (presented as physical certificates) into an electronic format or book-entry system through CDSC.

This simplifies trade and boosts the safety, efficiency, and clarity of the marketplace, fostering trust among sustainability-focused investors.

As per the records, the trading and transfer of the 16 billion Safaricom shares, which were initially in certificate form, were restricted. However, with dematerialization, these shares are now safely kept in an electronic format.

"The move will greatly improve the liquidity of Safaricom PLC shares as well as increase overall market transparency and efficiency," stated the CDSC release partly.

What reasons are there for immobilizing company shares?

By immobilizing shares, investors sidestep the risks associated with losses, forgeries, and delays in transferring ownership.

This adheres to the highest standards and practices prevalent in the capital markets sector, both domestically and globally.

The CDS manages 97 billion immobilized shares, which account for 95% of the overall equity market in Kenya.

Jesse Kagoma, the CEO of CDSC, pointed out that freezing Safaricom shares represents more than just a numerical achievement; it also signifies increasing confidence from institutions in CDSC's framework.

"This represents significant progress toward adhering to global best standards. We applaud Vodafone Limited for setting the pace in this shift," stated Kagoma.

The CDSC advised shareholders holding physical share certificates to consult their stockbrokers and registrars for assistance and direction on converting these into immaterial form.

Safaricom revenue

In the meantime, Safaricom achieved a milestone as the first publicly traded company in the East African market to surpass the KSh 300 billion revenue threshold, reaching KSh 388.7 billion.

In the fiscal year 2024-25, the top telecommunications firm announced a rise in profits from KSh 42.6 billion to KSh 45.8 billion.

During the reviewed period, Safaricom's net income increased by 10.8%, reaching KSh 68.8 billion.

Key points to understand regarding Safaricom stocks

  • The firm disbursed KSh 48.08 billion in dividends following the declaration of a final ordinary dividend of 65 cents along with an interim payout of 55 cents per share.
  • The Kenyan government owns a substantial portion of Safaricom with a 35% stake, resulting in the telecom company disbursing an interim dividend of KSh 7.7 billion to the Treasury.

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