Thursday, October 09, 2008

Safaricom 3s

Tracking the storm at 7, 6, 5, 4 and now Safaricom at Kshs. 3.70

Mobile notes
- Communications is perhaps the only significant sector that has gotten cheaper this year. Oh yeah also NSE shares are much cheaper this year
- Safaricom is fundamentally sound and performance on the stock market should not translate to the business side
- But Safaricom now has new competition from Zain, Orange and Econet with new offers that may cannibalize each other. Safaricom can’t possibly respond to each marketing overture from the newbies
- Competition will drive increase of (cheap) phone sales as subscribers add second and third phones e.g. Safcom for M-Pesa and Internet, Zain for cheap calls, and Orange for cheap SMS and even cheaper calls
- Safaricom ironically got nominated by Africa Investor Investment Awards for Privatization Deal of the Year ; other Kenyan companies nominated include Alliance for a Green Revolution in Africa (AGRA), the Ministry of Finance Kenya (for Credit Reference Bureau Regulations – relay? Are they original?) Kenya Commercial Bank, PricewaterhouseCoopers, Dyer & Blair, Morgan Stanley (for Safaricom IPO?), East African Development Bank (actually Uganda based), East African Breweries Kenya (for Best Employer), Evelyn Mungai (for Businesswoman, not TI Kenya), Mumias Sugar Company and KenGen (for Carbon Finance)

10 comments:

3nspeaks said...

Banks, even though Safcom's fundamentals have remained the same their revenue and profit growth is hinged on maintaining their market share and increasing value added services subscriptions.

I do not believe they have to react to every overture by Zain, Orange and Econet but at least they have to stay competitive especially on calls and sms so as not lose too much ground.

I think at 3.70,Safcom is a top bargain right now.

Chris Mwangi said...

banks if u remember my comment on your post safaricom 4s.....let me repost it....

Chris Mwangi said...
Am happy that its fallen thanks to what they did to the many Kenyans who applied....

Me am going to buy when it hits 2 shillings...which from realiable sources it wud....since Morgan Stanley would be offloading next week so am told.....

Foreigners are cutting their losses and running.....

All the best guys and watch My words its going down....2 shillings in the next 4 weeks....

Hope Banks can revisit this comment when it happens...

8/13/2008 12:09 PM

......again I reitorate my stand....shillingi mbili per share is coming.....

We await for it to reach 2 shillings.....

Anonymous said...

Great to hear about the competition , hoping Wananchi will realize it and spread out. That will help in keeping rates low.

propaganda said...

Blast from the past. You just reminded me they finally caught up with Terry davidson.

On Sh2 -- or even the current Sh3.70 -- I just don't get it. Why would anyone take huge losses when they can sit tight? I'd say only small fish are willing or dumb enough to take the hit at these prices.

pesa tu said...

You cant repeal the IP DoWN biz or stock cycles eventually the markets will recover.the bigissue now is the TIMING of one's entry.

bankelele said...

3N: So far their response (late night tariffs) has been weak. I’d like them to address the cost of MS and M-pesa transactions

Chris: back again? Is 2 the bottom?

Propaganda: Was TD the only Uchumi culprit? I hear not. On Safcom, portfolios are down, those who are selling are fearing that they may never recover, and are taking their losses now

Pesa tu: I agree, if it dips lower, I’m prepared to buy again

HATUA said...

Does CCK still has plans of regulating calling rates further down? if so safcom should better reduce its calling rates to more competitive one or else they might be forced to reduce when all the subscribers have Vukad. By the way have you notice nowadays you receive more call from Zain.

I wonder which criteria the nominees use...Nominating safcom is absurd..

carol said...

hi banks ..would be in a position to know the status of nyaga stocks will we ever be compensated...

Chebet said...

I am waiting for the time we shall be on a network for quality and nothing else:
Going cheap is great if it comes with quality; If our peculiar calling habits make congestion a must,ask Zain, now they know waht this means.

I heard it from the grapevine that after a board meeting last week, 50 mill is yet to be poured into zain's infrastructure, such are the challenges ( and good for us) that come with a global brand..

If orange is giving us one bob to chat, they better be ready to sustain it, as for safcom, for now I will stick with the blogger who "mis-spells " it as "safcon:-)

@ bankelele ..I am waiting for Safaricoms 2's....

Maishinski said...

You can make money when stock markets are up or down. You just need to know how...

By waiting for Safcom prices to hit 2/- Chris Mwangi actually lost an opportunity to make a tidy profit. It's probably too late now for him to do much about it.

Details? Long story. Maybe I'll post on my blog today when I have some time...

;-)

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