This archive report was first published on 29 October 2019.
Published on October 29, 2019, Safaricom's influence on the Nairobi Securities Exchange (NSE) has been a long-standing phenomenon. However, its dominance has now extended to the recently launched derivatives market.
According to data from the Capital Markets Authority (CMA), Safaricom accounted for the majority of 248 contracts on offer to investors out of a possible 349 traded contracts by September 30. This translates to a lion's share of 55 percent market turnover, equivalent to Ksh.6.9 million.
Notably, Safaricom led the pack in terms of open interests, with an average of 44 outstanding contracts in the three months review period. This is ahead of KCB Group's mean of 20.
Analysts attribute the extension of Safaricom's dominance to the equities market's lack of responsiveness to new innovations. Genghis Capital Research Analyst Patrick Mumu notes that there is a general lack of adequate investor knowledge among both retail and institutional investors.
