Safaricom had an investor's briefing today about its quarterly outlook, shed light on its share performance and also give its expectations about 2010. Has anyone got some more facts on this?

Aiisssh @2012, sentiments could be a big deal over nothing. Especially going by the sentiments I saw MJ express on the Aly-Khan interview...

I don't see the problem with divinded capitalisation scheme. It is infact a common scheme in more developed markets. This will however mean that extra shares have to issued in place of divindeds. Since it is an opt in opt out scheme, those who opt for cash will see their interests diluted. Maybe they will place a minimum dividend to be converted into equity otherwise just figure out Wanjiku converting divinded on 100 shares into stock. This will lead to lots of odd slots of say 7 shares which can't even be traded.

how does capitalising dividends benefit the company? its issuing more equity... according to the MM theory, isnt equity financing more expensive than debt financing?

Someone please shed some light on this.

@owenkyima. Usually the DRIP is usually done through treasury stock or unissued shares and shares are offered to shareholders at a discount.

Any dividend that doesn't involve a movement of cash may be beneficial from a cash flow point of view. Safcom issued a Ksh5 bn corporate bond shortly b4 they paid off their Kshs4 bn dividend last year.

@owenkyima plausible argument. What with 78b turnover, 23b invested in the year and cash of only 4b at end of period 2009.

I've always considered Safaricom to be one of the businesses requiring dexterity in use of debt - done well so far.