Monday, April 07, 2008

IPO Hard Choices

It’s getting very hard to stick with my avowed IPO bypass plan with Safaricom. The market is so liquid now, and may dry up later, so why not take advantage of it now? Also I read one I-bank analysis of IPO’s in the last few years, that shows that all (except Eveready) have significantly out-performed their IPO price, and Safaricom is no Eveready. Still reading Maishinski comments here about paying a premium, and likely refunds, there’s still great upside for capital appreciation, in a company growing at 30% a year with a likely dividend of 0.15 this year.


just when I thought I was out, they pull me back in!


More IPO
- Banks versus Brokers Dyer & Blair have set up an IPO center on Loita St. that is open 7 days a week (weekdays 7am to 7pm). Brokers have to fight tooth and nail with commercial banks to get their IPO commissions since the banks have a much larger branch presence to earn a 1% commission on each application. That’s why stockbrokers can be found in super markets, cyber café’s and bank halls (latest is Drummond and Suntra brokers at Consolidated Bank) selling IPO’s to earn their 1.5% commissions. You are sometimes scared of making contact with a sales agent when you walk past a bank tent or broker desk in a movie hallway with a Safaricom brochures and forms waiting.
- What’s worse than taking an IPO loan? Paying for shares using a Barclays card (or debit card)
- Regional: the first confirmation of an over-subscription comes the East African with a report that NSSF Uganda will get 1/3 of the shares tehy applied for – or about $11 million worth (out of $34 million). [1.3% of the shares on offer]
- CFC takes the IPO to Rwanda via Fina Bank
- International : Wambia Capital offers US institutional investors and high net-worth individuals a chance to invest in Safaricom service only applicable to sophisticated investors for secondary market issues
- Boardroom dealing: Former LSK Chairman Former LSK chair makes a damning accusationabout Mobitelea and its cabinet allies.

7 comments:

coldtusker said...

Banks - It sucks when the Kenyan 'Wanjiku' is being given the short end of the stick... She gets only 34% while the fat cats e.g. NSSF (Uganda) get a favored position. Kenyans were treated as 2nd class citizens during Stanbic.

Tanzanians should be locked out. They do NOT allow Kenyans in their IPOs.

The 35% to foreigners also rankles me. This should have gone to Wanjiku.

tengeza said...

I smell a HUGE over subscription with this one. I highly doubt the price will rise quickly for most short term investors. This one s definitely for the long term. NSSF (U) is really taking up a huge share. I wonder how many other people are doing the same.

Ssembonge said...

Wambia capital retracted their earlier press statement regarding facilitating the Safcom IPO.

If they are doing so, they risk facing the wrath of the SEC. And I believe this issue has been addressed in the prospectus.

Which leads me to ask? How are foreign investors being courted?

Here are both press statements;

http://www.marketwire.com/mw/release.do?id=837784

http://marketwire.com/mw/release.do?id=838751

ka-investor said...

@coldtusker: we have been robbed, clean. Kenyans should have been given preferential treatment. Just like ugandans did during Stabic UG. Tanzanias never invite us to their IPO's. I was there over Easter and kenyans are treated like foreigners, everywhere you go you have to pay 3x the normal price.

Maishinski said...

Banks, remember no one is complaining about the fundamentals...

We're pissed by the technicals and external factors(price, foreign investor interest, mobitelea, speculation "setup", political stability, inflation, exchange rates etc)...

I gave a Thumbs Down on Access Kenya and Kenya Re. I still stand by it. The shares are way overpriced!

But Kenyans investors don't buy stakes in companies - they buy "shares". Greed for a quick buck being the key driver. With tat in mind... (need I say more?)

Am going all the way with this one. No holding back. Whatever the outcome.

Lets review the 3 IPOs Kenya Re, Access Kenya and Safcom in 2010 (God willing)...

:-)

bankelele said...

coldtusker: I am yet to see any reports from TZ. Wanjiku will probably apply for more than 5 billion shares.

Tengeza: Price rise, will not be as dramatic unless assisted - there are so many shares i.e. 1/4 of the NSE is Safaricom float

Ssembonge: Thanks for the Wambia tipoff

ka-investor: Ugandans shared Stanbic ina good manner, I have no problem with Kenya returning the opporunity. But Tz...

Maishinski: I agree,we have to ignore the noise and look at the company as a long term investor based on fundamentals. ha ha ha. See you in 2010.

Sahito said...

As tempting as it is to lock out tz and the like, we have to continuously show good faith and hope that they will eventually be compelled to reciprocate it.

Tit for tat will never solve anything

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