Safaricom share price hinges on global mood
* Share price at mercy of global situation, says chief exec * Better results projected for H1
NAIROBI Oct 23 (Reuters) - The price of east Africa's most closely watched stock, mobile operator Safaricom (SCOM.NR), which has dropped 30 percent since its issue, will only recover once world markets stabilise, the chief executive said.
Floated in June, Kenya's most profitable firm first saw its share price soar 50 percent, then drop precipitously, to 3.50 shillings ($0.043) on Thursday from its 5 shilling issue price.
That move shocked investors and dragged down the Nairobi bourse, whose main index .NSEK has dropped 33 percent this year.
"I think it's going to take some time before we see the share price return to what it should be," Chief Executive Michael Joseph told Reuters. "We'll have to wait for stability to return to world stock markets."
He said those selling the stock were not local retail and institutional investors but international hedge funds.
"It is quite sad, particularly for our retail investors who borrowed money."
The Kenyan government, which wanted as many Kenyans as possible to hold the stock when pricing it, sold a 25 percent stake in Safaricom in the region's largest IPO in June. Britain's Vodafone (VOD.L) leads a consortium which has a 40 percent stake in the firm.
MOBILE INDUSTRY STILL HEALTHY
Joseph said the global economic woes would impact business in general in Kenya, but that the mobile industry was somewhat immune to the problems.
"Most of our customers are Kenyans -- the man on the street type person who won't necessarily be much impacted."
Joseph expected half year financial results, to be announced early next month, to be much better than the same period in 2007.
Annual pretax profit came in at 19.9 billion shillings for the year ended March 31, which was a 16 percent rise on the previous year.
The company has more than 12 million customers in a country of 36 million, Joseph said. The firm has over 80 percent market share.
Telkom Kenya, held by France Telecom (FTE.PA), and Kuwait's Zain (ZAIN.KW) both have mobile networks in Kenya. Johannesburg-based Econet Wireless is due to launch another network next month.
(Editing by Sharon Lindores)
((nairobi.newsroom@reuters.com, +254 20 222 4717))
($1=79.90 Kenyan Shilling) Keywords: KENYA SAFARICOM/
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