Unclaimed Wealth: Safaricom and KCB Shares Worth 1.2bn Unclaimed
More than 1.2 billion shares of blue chip companies, including Safaricom, Absa, KCB, and Britam, have been returned to the Unclaimed Financial Assets Authority (UFAA).
According to new disclosures made by the Nairobi Securities Exchange (NSE) to the UFAA, Safaricom topped the list of abandoned shares, worth billions of shillings, after surrendering 196.4 million shares.
The unclaimed Safaricom shares that would generate Sh3.5 billion today represent nearly one-fifth, or 16.3 percent, of the 1.203 billion shares that were designated as abandoned by the UFAA at the end of last year and had an estimated market value of Sh30.17 billion.
Absa, KCB, and Britam are notable counters with unclaimed shares numbering 44.7 million, 44.5 million, and 34.8 million, respectively.
Notwithstanding, certain counters, such as Kenya Power, have no unclaimed shares, with the NSE disclosing a 100 percent success rate in reconciling over 43.5 million shares that had fallen into the unclaimed status.
Analysts have attributed the large number of abandoned Safaricom shares to the counter’s dominance and appeal, particularly among retail investors, which makes the share one of the most held on the NSE.
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“Safaricom is a blue chip and the golden egg for our NSE, so it has a significant investor base. Similarly, this increases the likelihood that the stock will be among the most abandoned on the NSE, as noted by Wesley Manambo, a research analyst at Genghis Capital.
When a shareholder fails to claim a dividend, distribution, or other amount payable as a result of an interest held for more than three years, the shares are typically categorized as unclaimed or abandoned.
The UFAA Act also stipulates that shares become unclaimed after three years if the business entity is unable to locate the owner.
Similarly, a share is considered abandoned when official shareholder notifications or communications are not returned.
However, Mr. Manambo argues that the criteria for identifying shares as abandoned conceal the participation of long-term investors who routinely purchase shares and maintain a long-term holding position without contacting brokers.
The NSE, in collaboration with the UFAA, is examining unlocking strategies for unclaimed shares with an eye toward market liquidity, value discovery, and capital gains.
Among the proposed strategies is the consolidation of odd lots (usually less than 100 shares, the minimal tradable volume) and their trading on the NSE.
Unclaimed Wealth: Safaricom and KCB Shares Worth 1.2bn Unclaimed
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