Friday, March 28, 2008

Safaricom IPO starts

The launch ceremony was held on Friday morning, and this came after several lively debates on TV news shows last night on the issue of if the IPO should go on

A bit of politics: ODM and civil society were a bit late to the party (they have known for two weeks that this was coming), with final complaints about Mobiltelea. And ODM MP’s (Anyang Nyongo and Omingo Magara) went ahead to put a caveat notice in the newspaper today warning investors that the Safaricom privatization is being done outside of existing privatization law, the privatization commission supposed to oversee the process has been sidelined and that there are conflicts of interest among transaction advisers.

That out of the way, it is clear that Minister Amos Kimunya and the rest of Government doesn’t want to hear about Mobitelea or have anything derail the IPO which will net about 50 billion shillings ($770 million) to the Government for rebuilding.

Why start early?: That out of the way, day one is rather quiet, with not too many queues outside some stockbroker offices. But there’s almost a month to go, and Kenyans are not very time conscious initially. This will change next week, as investors will have been bombarded with questions of the process, are looking for cash or are wading though loan sharek offers from various banks and SACCO’s before placing their orders. I hope ether won’t be calls to extend the process for late-comers late in April!

Official sites: Safaricom also launched a revamped website to coincide with the IPO. There are also two official sites, for online applications and information - but the prospectus is yet to be put up on either.

Shooting blanks: All week long the Business Daily has been promising a feature edition that would help investors identify the good from the bad brokers. But when your own CEO is a director of a stockbrokerage, that’s about as serious as a member of Karen club complaining about the green on the 18th hole at Muthaiga club course. The 20 page issue issue aimed at sophisticated investors does not name names or go beyond tips and guidance on ethical stockbrokers, how to select a broker, qualities to look for in a broker (office premises, reporting frequency, staff qualifications, ownership - How??) for 20 pages full of advertisements by the same brokers. So you’ll have to be satisfied blogs, forums or other online channels to find out the good and the bad of brokers.

East African investors: CFC announced this week that they have they have crossed the 100,000 CDS (online investors) account mark. But a Uganda stockbroker does not get expect to get more than 2,000 applications owing o the passport requirements
- Meanwhile you can design a logo for EASEA - the East African Stock Exchanges Association.

Other opportunities from the papers

- Barclays: relationship manager - SME banking, local business development manager, local business advisor.
- Deloitte: (2) business Analysts’ corporate financial services: by 5/5
- Insurance regulator authority; manager technical, finance manager, company secretary (legal manager), by 15/4


coldtusker said...

Its crazy when you can't get a prospectus from the official website... shows there was haste!

If they go thru with it, I agree with you that they should not extend it. It means that the funds are stuck longer than they should be for those who apply on time. My gut says this will go on till 30 April...

Odegle said...

am so excited that finally this thing is here with us. Just wondering though if the retail investors will be able to absorb the 3.5billion shares on offer.

Ssembonge said...

The official prospectus is not out and people are already buying.

What do they think they are buying? Bananas?

Only in Kenya!

bankelele said...

coldtusker: The elephant is out of the gate. I forsee a demand for more shares from locals (i.e dip into foreign pool)
- hope it goes online over weekend

Odegle: absolutely all it takes is 1.7 million applincants

Ssembonge: prospectus is out, available at some brokers.

Anonymous said...

i think if ODM really wants to solve the mobiltea issue they should be talking to UK law enforcement and vodaphone.

having said that im opposed to the manner of sale for different reasons.
i think this safaricom issue is a transfer of wealth to some kenyans and the expense of other kenyans. I think it would have been more beneficial to the country if the shares were sold for a premium and no restrictions were put in place.

local sale means no wealth has been created for kenya as a whole rather its shifting money from one segment of the economy to another. while foreign purchase would bring foreign money that would benefit the whole economy and more money to treasury for ALL kenyans.

besides i think safaricom is peaking. 2 thinsg are against it. technology and competition.

aight let me duck and hide.

siasazaturudishanyuma said...

I wonder if ODM MPs like Nyongo will buy the shares, having come out with "strong moral and nationalistic justifications" for boycotting the issues.


My bet... its ugali time: politics kando.. morality kando.. mobitelea kando... EVERY MAN FOR HIMSELF!!!

Mobile industry penetration is so low that, provided the per capita income goes up across the board, and political stability is maintained, Safcom is assured of growth and good profits for the next decade or so.

KenyaUnited said...

..In other news, the Professor of backwardness and Anti-development, Mr. Anyang Nyongo is consulting his wichdoctors to check whether casting a spell on Mobitelea will prevent them from rigging the IPO.

The witchdoctor allegedly requested him to come with the canine teeth of a one legged duck.

The quack professor is busy at Karura forest with bows and arrows hunting for the said duck...

Meanwhile... Prezzo, Raila and Key ODM MPs gave their blessings to the IPO and urged all Kenyans to buy the shares and IGNORE ANY ADVICE by the dumbass professor of backwardness and self destruction.

All kenyans deserve a piece of this pie. Just because Anyang wasnt ready doesnt mean Akinyi and Wanjiku were not ready. Bring it ON!!!!!

pesa tu said...

@ banks: remember all those arguments we had on Cyberspace last year on Safaricom?
Well those of us who thought it would come turned out to be correct.

@ Ssembonge: Kenyans don't worry about things like the prospectus

Maishinski said...

when dyer & blair say "we know you know", isn't that the height of impunity?

I mean it's like "yeah, we know you know about Mobitelea, but UTA DOOO??"

Anyway, mobitelea have eaten more money from safcom DIVIDENDS over the past years than they ever will get from the IPO. Did you see the earnings per share before the shares were broken down to 0.05 par value?

BILLION DOLLAR QUESTION: If Mobitelea is untraceable, then where does it's dividend cheque go? Who collects the cash? Its easy to track these guys down.

What if safcom withholds the dividend cheques for Mobitelea until they identify themselves as legitimate non-criminal investors? who would sue?

What if secondary trading for safcom is restricted only to shares issued in the IPO?

If Mobitekea is the result of illegal kickback deals or a Money Laundering operation, the anti-corruption units from UK and Kenya should expose them even after the IPO.

.. and those who think 5 bob is kidogo. You are buying shares whose FACE VALUE is 5 Cents. If safcom went into liquidation, your 2000 shares will be worth 100 bob (max you can claim).

So each 5cent share you're buying is already priced at a premium of 100 times its value. These shares are NOT cheap at all!

Read the fine print...

Anonymous said...

Hi Banks,
Thanks for the great post as always - just a quick question.. you mention that one of the things to do for safaricome is to attach yourself to a QII etc.
What do you reckon is the likely subscription for QII as compared to the retail investors do you reckon? 25%? 50%? Full allocation!?!
Thanks for the good work

creditkenya said...

You can download the prospectus from Note that the site is actually a Dyer & Blair sub-website.

inspectordanger said...

The retail pool will be oversubscribed. Remember we are sharing it with UG, TZ, RA and BI. Already prezzo has applied for 1M shares.

QII will also exhaust theirs. Bankelele, you or any other person, can you predict the dividend considering that the value of the safcom shares have be diluted? I am going by between 10 to 15 cent per share.

smith said...

hi,You have a very good blog that the main thing a lot of interesting and useful!thanks IPO consulting services


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