Safaricom Limited’s share price is expected to decline after the book closure at its Annual General Meeting held on Friday (September 2).
As of September 2nd, the company was the most actively traded stock accounting for 58.79 percent of the total market value traded activity at the bourse recording a turnover of 1,146.86 million shillings representing 57.39 percent of total activity and 65.16 percent of foreign investor activity.
Towards the end of August, the telecommunications company had the highest net foreign inflows were however, its share price had remained constant at Ksh 20.
Subsequently, during the month, its share’s year-to-date gain stood at 29 per cent, making it the best performing stock on the NSE this year as investors eyed the dividend payout.
Read: Safaricom Share Price Clocks New High
The company is set to pay shareholders Sh57 billion in dividends for the year ending March 31, 2016 according to its Chairman Nicholas Nganga.
Each shareholder is expected to be paid KSh0.68 per share an additional dividend over and above the Sh0.76 per share for the year ended 31st March 2016.
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Book closure – often used to identify the cut-off date determining which investors of record will be sent a given dividend payment. It helps determine who gets the dividend – for the two dividends will hence total to Sh1.44 per share as at 2 September 2016 and will paid out on or prior to 1 December 2016.
The company’s shareholders comprises of Government’s holding of 35.0 percent, Vodafone’s 39.9 percent while 25 percent is floated at the Nairobi Securities Exchange (NSE).
After the book closure date, the price of the stock usually drops by the amount of the dividend, since buyers after this date are no longer entitled to the dividend.