Safaricom dominates start of day trading

Safaricom dominates start of day trading

  • After commencing on a subtle note last Monday, day trading, measured by the size of Equity turnover peaked at Ksh.1.5 billion and Ksh.2.5 billion on Thursday and Friday respectively.
  • The record turnovers were however dominated by Safaricom’s counter which represented 95.6 per cent and 61.34 per cent of trading on the back to back trading sessions.

Telecommunications giant Safaricom has dominated the start of day trading at the Nairobi Securities Exchange (NSE) as it seemingly spreads its hold of the market.

After commencing on a subtle note last Monday, day trading, measured by the size of Equity turnover peaked at Ksh.1.5 billion and Ksh.2.5 billion on Thursday and Friday respectively.

The record turnovers were however dominated by Safaricom’s counter which represented 95.6 per cent and 61.34 per cent of trading on the back to back trading sessions.

Turnovers for the counter stood at Ksh.920.1 million and Ksh.2.39 billion respectively in the pair of days where more than 100 million share units were traded.

Evidence from the opening week of day trading shows Safaricom is likely to extend its dominant run in the new segment just as has been the case in primary trading.

According to data from the Capital Markets Authority (CMA) soundness report covering the quarter to September 2021, the NSE remains with high market concentration risks with the top five companies averaging 80.95 per cent of market activity in the period.

“The top five companies account for more than 80 per cent of the total market share at NSE during the quarter with telecommunication sector (Safaricom) on some instances accounting for 60 per cent of the market share,” noted the markets regulator.

To remedy the dominance, CMA is banking on the overhaul of public offers, listings and disclosure regulations to attract larger private sector corporates and small and medium enterprises (SMEs) to market.

Safaricom is also the NSE’s most valuable company with a market capitalization of Ksh.1.687 trillion as of the end of June 2021.