How to Buy Safaricom Shares in Kenya

Safaricom is Kenya’s leading Telco in terms of subscription and market share. As of September 2020, it commanded a market share of 63.7%. According to information on its website, it earns annual revenue of over $1billion, making it one of the few African companies in that bracket. This makes it arguably the richest company in Kenya. Because of that, the company’s shares listed on Nairobi Securities Exchange (NSE) are an easy pick for Kenyan investors to buy. If you do not know the procedure on how to buy Safaricom shares in Kenya yet, you can find out about it and more in this article.

 

Apart from calls, SMS, and data revenues, one key segment that has largely contributed to Safaricom’s revenues over the years is its mobile money feature – M-pesa. Since its inception in March 2007, the service has been a household name across the country, earning the telco a lot of revenue annually.

 

Safaricom commenced listing its shares on NSE in 2008 which were then oversubscribed by the public. Currently, Safaricom’s shareholding structure is as shown below:

• Government of Kenya – 35%
• Vodacom – 35%
• Vodafone – 5%
• Free float – 25%

The 25% free float is the share that is listed on NSE for the public to trade in.

 

When you buy Safaricom shares, you can earn money in two ways:

1. Dividends: Dividends are the money a company pays its investors. The number of dividends you can expect to be paid will depend on the number of shares you have. However, it is not a guarantee to earn dividends more so when a company keeps making net losses.
2. Selling your Safaricom shares: You can earn money by selling your Safaricom shares when the price is higher than the amount you bought them for. This is done through a Stockbroker. However, when you sell your Safaricom shares to someone else, you will no longer be able to earn dividends from them. If you sell all your shares, you will cease to be a Safaricom Shareholder.

 

Requirements Needed to Buy Safaricom Shares in Kenya

1.    Capital

First and foremost, before you even think of buying Safaricom shares in Kenya, you need to have capital. This is the money you will need to buy the shares. You must know the price of Safaricom shares and other costs upfront.

 

A single Safaricom share currently costs between Ksh.35 and 40. The minimum number of Safaricom shares that you are required to buy is 100.

2.    A Central Deposit and Settlement Account (CDS account)

A CDS account is an electronic account that holds all the shares an investor has. It is free of charge to open and is usually done via a Stockbroker.

 

Two coloured passport size photos, a KRA pin, a copy of national ID or passport documents are some of the requirements needed to open a CDS account. A CDS account number will be issued once you have successfully opened it.

3.    A Licensed Stockbroker

You as an investor can not directly trade on NSE. It is required by the law that a licensed Stockbroker should be the one that does the trading on your behalf. They are teams of professionals that provide in-depth analyses of the stock market. They may also advise investors subscribed to them on a variety of issues as far as the stock market is concerned.

 

Stockbrokers may come in the form of commercial banks, investment banks, and brokerage firms. Some factors to consider when choosing a Stockbroker include the amount of fees they charge and whether they provide online trading or not.

How to Buy Safaricom Shares

As long as you have all the above requirements, there are several available methods in which you can buy Safaricom shares in Kenya as shown below:

1. Using a Stockbroker or bank
2. Using online means
3. Using Bonga Points

How to Buy Safaricom Shares Using a Stockbroker or a bank

Apart from Stock brokerage firms, some banks also offer brokerage services to investors. Below is the procedure to buy Safaricom shares through a Stockbroker or a bank.

1. Go to your Stockbroker or bank and inform them of your intention to deposit your investment in your CDS account. You will be directed on how to do so.
2. There are several accepted payment methods you can use like M-pesa or bank. You will be provided with all the information regarding the transaction process. Note that the minimum number of Safaricom shares you can buy is 100. Also, the number of shares that you should buy must be a multiple of 100 shares.
3. You will be provided with an order form to fill. Once you are done, it will be executed by your broker.
4. That’s all. Your newly-bought Safaricom shares will now reflect in your CDS account in about 2 days.

 

How to Buy Safaricom Shares Online

If you wouldn’t like to move around, making trips to your stockbroker just to buy Safaricom shares, then buying them online is an option that is available, fast, and convenient for you.

 

The availability of various payment methods like Mpesa and bank transfers makes this method of buying Safaricom shares even more convenient. Here is the process on how to go about it:

 

1. There are several available online trading apps like FXPesa, Faida Investment Bank, and SBG Securities to name just a few. Download one either to your phone, tablet, or computer.
2. Log in and fund your account by using any available means like Mpesa or any other means.
3. Look for a link to buy Safaricom shares.
4. Select the number of shares that you would like to buy.
5. Wait for your newly-bought Safaricom shares robe reflected on your CDS account.

Note: Not all Stockbrokers accommodate the trading of shares through this method.

Read>>>>How to pay for Safaricom Home fiber internet via Mpesa

How to Buy Safaricom Shares Using Bonga Points

Did you know that you can buy Safaricom shares using Bonga points? That would be awesome if you are the type of person who likes accumulating them. This will save you some cash.

 

In this case, every 5 Bonga points translate to Ksh.1. Here is the procedure on how to do it:

1. On your Safaricom phone, key in the USSD code, *126# and press the call button
2. On the menu that pops up, look for “Lipa na bonga points” and select it
3. Select the option that reads “Paybill”
4. Enter the business number of your trading participant
5. Enter your CDS account number as your account number
6. Enter the amount that you want to pay in cash and complete the transaction

Shares
✔High returns when you buy the right shares
✖High risk
✖Capital retention not assured. You can lose your money
📝On Nairobi stock exchange, you can buy at least 100shares for a company at a time. Today Safaricom shares sold at 39.95, with 4k you can get started.

— Bassam (@Bassam_KE) November 19, 2021

 

Conclusion

Buying shares on the Nairobi Securities Exchange, especially Safaricom shares, could be a step in the right direction. Owing to the company’s reputation, you need not worry about your investment since you will have put your money to use instead of letting them lie idle in some bank account.