Thousands of Kenyans who became shareholders for the first time by buying stock in Safaricom, Kenya's biggest mobile phone company, made hefty paper profits yesterday as the shares surged 60 per cent in their first day of trading.

Analysts said that the massively oversubscribed initial public offering - East Africa's largest - signalled a return to confidence for an economy rocked by ethnic clashes and political violence that followed disputed elections.

It means a windfall for the thousands of kiosk-owners, farmers and artisans who have invested in shares for the first time. The sale also attracted experienced investors, aware that there was plenty of room for growth in a country where only about a third of the population has used a phone.

Safaricom has more than 860,000 shareholders, the widest shareholder base of any Kenyan company. The shares hit a high of eight shillings (about 6p), well up from a sale price of five shillings to local buyers and five and a half shillings to foreigners, before dropping back to seven shillings, valuing the company at about £2.25 billion.

President Kibaki rang the bell to open trading at Nairobi stock exchange yesterday morning. The Government stands to make about £400 million by selling 25 per cent of the company. Vodafone owns 40 per cent. The President said: “The response by Kenyan and international investors was overwhelming, making this IPO the most attractive offering in our history and possibly in the rest of Africa.”

A frantic day's activity by traders is a welcome return to normality for the region's biggest economy. Kenya's tourism and agriculture were badly affected after violence in January and February. About 1,300 people were killed and hundreds of thousands displaced.

Yet the disruption did not deter taxi drivers, hotel workers and ordinary Kenyans from converting their savings into shares. Many have no bank account but scrimped to buy a handful of the ten billion Safaricom shares. The sale was oversubscribed by more than 500 per cent.

Samuel Wafula works in the informal economy - standing in queues or doing odd jobs for busy people - but saved up to buy 20,000 shillings of shares. “I will hold them for a long time because I know that Safaricom is only going to get busier and their shares will go up and up,” he said. “I will only sell them if a relative dies or some other calamity affects my family.”

Subscribers have been awarded about 21 per cent of the shares they applied for. Institutional and foreign buyers were given 31 per cent and 15 per cent of their bids, respectively.

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