Saturday, January 23, 2010

Safaricom DRIPs

On Thursday Safaricom announced the possibility of allowing investor to use dividend re-investment programs to utilize their dividends to purchase additional shares in the company.

Last year post was about DRIP’s and other ideas that Safaricom can adapt from Vodafone to manage their large shareholder base.

Promote alternative methods for shareholders’ to enhance value. Support a dividend re investment program (DRIP). Not everyone wants an M-Pesa dividend; some may prefer to buy 100 more shares in the company instantly, while the shares are still cheap (Kshs. 3.7 or ~$0.05 per share) and a DRIP will be a useful tool that keeps cash within the company and its owners. Alternately, if feeling philanthropic, Vodafone shareholders may donate their meagre shares to a charity - and why not to a school in Kenya that was Tahidi High last night!

Other IR Initiatives: This requires approval of Nairobi Stock Exchange share regulators, but now that the Mobitelea monkey has been shed, Safaricom is leading in the region in terms of investor relations = and their latest media briefing was put up at their website in one day, while their CEO's exclusive interview at is also up on the internet.

Other suggested proposals mentioned at the media briefing include share consolidation, and an employee share option program (ESOP), which however have a mixed record in corporate Kenya.


Anonymous said...

DRIPS encourages a long term view hence is agood thing.

I wonder which tribe will be the first to make Michael Joseph a community elder... Think the CSR benefits!


bankelele said...

US ambassador Raneberger is an elder in some communities, and I’m sure Michael Joseph has also been honored in the same manner. Also it’s been noted that Safaruicom CSR project trend to the home area of the sitting Minister

coldtusker said...

DRIPs (depending on how they are structured) may or may not keep the money 'within' the company.

A DRIP that buys shares on the open market means a transfer between shareholders.

If the DRIP is allocated 'new' shares then the cash remains 'within' the firm


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