Wednesday, April 11, 2007


Who need the LSE?

Safaricom is our birthright built on the voices, fingers, and shillings of Kenyans. It has been a model for social advancement, ability of ICT's to bring development, empowerment, democracy, awareness, the long tail, proof that cents (and shillings) can grow into billions in profits - etc.

It is peculiarly Kenyan right down to its flaws such as congested hours, high costs, and secrets owners (Mobitelea). That's why Safaricom should be listed on the Nairobi Stock Exchange, not the LSE

It is our birthright - like an African child who takes money out of their parents pocket for eighteen years and should put some back when they grow up. British shareholders will never understand how bamba 50, sambaza, mteja or m-pesa, translate into profits & dividends - nor should they be asked to.

The NSE was able to absorb Kengen and still left twice as much money on the table with negligible impact on other share prices. Likewise, it will be able to handle a Safaricom IPO.


Jakarumba said...

Banks, I saw this one on BD, I think the market can absorb Safcom without distabilising anything. Why should we share our diamond with foreigners? Remember how Uganda was protectionist during the Stanbic IPO?
I dont thionk any AMerican or Briton would even dare dream of selling their Exxon Mobil or Tibbett & Britten in the NSE.
I see TC's hand in that whole plot of off-shoring.

MainaT said...

Who comes up with these ideas? Instead of fixing the problem which is that KCB and the whole distribution line was and hasn't got its act together, we now say lets give the problem to somebody else?
As you say banks-Kenyans made Safaricon end of.

Nelie said...

TC<---nini hii? Tom Chomondley???

Michael said...

I trust the govt will decide against listing on the LSE.Kenyans need this.

bankelele said...

All Rant aside, I don't see this happening. It would be political suicide in an election year.

Jakarumba: I agree the market can absorb safaricom, and a due diligence will show this. Who's TC?

MainaT: No chance, remember banks have already funded Telkom restructuring with shares of safaricom as security.

Nelie: Tom Cruise

Michael: election year trump card. Itakua hapa hapa tu

Ke said...


Aren't you a proponent of free markets and globalization?

Anonymous said...

economic nationalism eeh,

i beg to differ with you banks, first
i think overall the economy will be better off and of safaricom is sold on int'l markets.

first 1. the valuation is out of whack based on any sales in africa
so i think selling it for cheap at that valuation on NSE will be transferring wealth from the people to a small class of the population - i think the govt has a fiduciary responsibility to find the highest price for the peoples assets.

2. there is only a certain amount of money circulating in the country so investemnts in safaricom takes away from investment in other sectors we need the external money in the economy in order to expand our economy.

3. maybe we can find a midway soution where we can benefit from intl investment and at the same time expand local ownership. i think that would be ideal.

also i think we need to look at that valuation. that the trick that russian oligarchs used by buying undervalued govt assets and resellling them at higher prices.

Ssembonge said...

I find it hard to believe that a 30 billion shillings IPO can destabilize a +700 billion shillings bourse.

The only reason for the government to list abroad is to raise more money than they would if they are to discount to Kenyans.

Banks should limit how much they lend to buy shares. It can lead to a catastrophe throughout the market.

Anonymous said...

@ ssemmbonge
how much of that 700Billion is actually liquid and traded of the most valued stock only a tiny fraction of ther value is actually traded on the exchange. and the i come back to that valuation

more money from abroad means more money for schools,health and infrastructure more money held in banks which means more money available to lend - less govt borrowing lower interest rates

Anonymous said...

The white man's burden...

E-Nyce said...

Banks: I've never read you write something so...silence-inducing...since I've been visiting your blog. I've reread it twice and must conclude that you're being satirical. Otherwise my respect for you would seriously diminish.

Anony: I was with you until the "more money from abroad means more money for schools,health and infrastructure" line. Umm, you do know we're talking about Africa here?

Yeah, well, I'm with the article. If Sijuicom really is going to pull a large pot from an IPO, then the listing really is too big for 'just' Kenya. If the offer's so sweet, they can pull a nice stash by offering internationally.

BTW what's stopping a collective of foreign investors from getting in on this offering even if it stays in Kenya? We don't want that, as they will have gotten the stocks at a serious discount.

I don't believe there is enough free-floating capital in the country to sustain this without a run on other stocks. As the article described, investors will dump other stocks en masse to get a piece of a company that has not only done so well, but can only grow. Especially since you can be sure that the Govt will continue to drag their feet to allow other telecom competitors into the market.

Did we all read the same article?

I wouldn't float it on LSE, and definitely not in NYSE (sorry to sound like a traitor), even if that's where the money's at, due to large transaction fees, and stoopid "anti-terrorism" and regulatory oversight policies. I'ld pick either Dubai or Singapore, or elsewhere. It's called 'globalization', people - if you want the stocks, you can buy them from anywhere. If you want to sell them, you can sell them from (almost) anywhere.

Don't worry, Kenya Govt Officials, investors with lots of cash will definitely still step up to purchase the shares.

Yes, sadly, this will shoulder-out common wananchi, but do we really think that Sijuicom or KGovt really care?

alexcia said...

The only way this makes sense wase if Scom intends to go on an acquisition binge

I dont believe Scom has the capacity to handle the extra scutiny that goes with being listed on these exchanges...quaterly earnings reports, earnings projections and warning, GAAP etc would cost just too much

Jakarumba said...
This comment has been removed by the author.
Jakarumba said...

Nelie and Banks, TC is Transcentury.
Ssembonge, I believe majority of Kenyans borrow more from SACCOS than banks.

bankelele said...

KE: absolute birthright, foreign investors can participate. The LSE has vodafone

anon: They can split the shares 10 or 100 times and make it affordable for wananchi (whuich they will). By highest price, you may be selling to foreign investors who don't understand the basics of what made safaricom so profitable
- kenyans from abroad can (should) invest

Ssembonge: Business daily looks at that today. The banking sector could experience a liquidity crunch if 30 billion is parked at one bank, but if the funds are spread among many receiving banks sorts out that problem

E-Nyce: why silence inducing?

alexcia: grater scrutingy and disclourse will come automaticaly once it become a public company, regardless of which exchange

Jakarumba: TC have shown a knack for leading into new ventures, not following teh masses. They may not touch safaricom because everyone else will

pesa tu said...

I think Safaricom should be dual listed like Telkom SA and other SA stocks i.e.have a listing on the NSE and a Depository Receipt(ADR) on the NYSE.
That way Kenyans own a stake+ we get foreign exposure.T
he large Kenyan co.s should look for listing abroad(USA) via ADRs.Nigeria,South Africa, Egypt even Zimbabwe have companies listed abroad in this manner

ke said...


If it's private banks lending money to whomever, they can do whatever it is they want. If people lose money and are unable to pay back those loans, that'll become the private banks problem.

Anonymous said...

for your info KPLC and i think KCC weer once listed on the LSE - dont know what happenend

Anonymous said...

You are so right on this. I am old enough to remember the "Asian Flu", that is when western investors went into panic and stampeded out of South East Asia. Many solvent and profitable companies in places like Thailand, Indonesia, Malaysia had to declare bankruptcy. I remember Malaysia, having to institute monetary controls to stem the tide. Working in the financial Industry out here I can easily see analysts issuing warnings about Safaricom, when something happens in Somalia, Zim, Congo, etc. I can see this stock being classified as an "African" stock, subject to all African biases, prejudices, etc. A warning from an analyst could result in a downgrade of the debt rating, and suddenly cost of money increases. Or wait for the shareholder lawsuits. Sounds like Africa Online story (foreign investors/owners who could not see the value), different characters.

About getting money, investing from overseas is an ordeal, if some of the financial firms invested in technology and marketing they could make a killing. I sometimes here financial firms coming to the UK, and US, but it is all so secret, could they just advertise in nation? I see my Philipino friends attending investment meetings with financial firms based in Manila, why not us?

Anonymous said...

Analysts will kill/hammer them any day they miss the EPS target.They need to do it on the NSE with all the back linkages to the economy.Abroad bourses tend to be shortsighted, look at the current trend to go private.All the costs to translate financial statements to their accounting standards.The grandfathers of capital will always follow profits wherever there are.Make the world and investors come to Nairobi.Why hasn't the Kenya Tourism Board used Braitore's presence to sell Kenya more.I mean he is on the Forbes cover for the billionaire issue

kekule said...

e nyce you highlight a few interesting points - my major concern is the ability of the local market to digest the S/com IPO! transparency is something the CMA needs to work on (should we not be able to see the flows in the market for each stock broken down by time, qty, paid/given without revealing the counterparty.

keep up the goodwork guys - information is key


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