Friday, April 04, 2008

One week gone

The Safaricom IPO is one week old today

IPO briefs
- Reason #1 to have government as a shareholder = tax breaks!: Not that Safaricom needs any, but the increase in share capital to Kshs. 6 billion has been exempted from stamp duty by the Finance Minister – saving the company about 6 million shillings ($94,000)
- Across the border: From Uganda we hear that Dyer & Blair is selling the shares at shopping malls, as is Uganda Telecom, while Standard Chartered Uganda is offering margin loans of up to Ushs. 50 million to buy IPO shares (~370,000 shares) what about Tanzania?
- More finance; Equity bank give the privileged Safaricom employees up to 100% finance, while even Barclays is hawking shares at it’s 112 branches. Also add Equatorial and K-Rep to the banks offering 100% finance
- Proactive MP : from an offline story in the Nation Nyeri Town MP Ms. Murugi Mathenge and the Nyeri South DC hosted an investors briefing on the Safaricom IPO. I hope other MP’s are as enterprenual and in touch with their constituents.

Opportunities

jobs on offer
from the papers

Top government vacancies
- Communications Commission of Kenya (CCK): director general & CEO who will regulate Safaricom and the telecommunications sector
- Director general at the Kenya civil aviation authority (KCAA)

Banking
- Equity Bank business growth & development managers, credit corporate relationship managers, credit managers
- KCB: business development manager, head, facilities & property management
- Gulf African bank: legal officer, corporate relationship managers, (Nairobi, Mombasa), manager structured finance recruitment@gulfafricanbank.com by 11/4

Others
- ICT Manager at Safari Park Hotel
- East African breweries: IS lead – great lakes region, logistic manager
- Telkom Kenya Chief HR Officer.
- Program assistant at the Open society institute for eastern Africa OSIEA

blog-exclusive!: Following the outcry over the announced large (bloated), a government committee has come up with an ideal ideal cabinet for Kenya of just 16 Ministers! fit in the names

6 comments:

coldtusker said...

The scam is on retail investors... after doing the math... I am pissed off. I might post in on the blog if I have the heart to do it!

The Kenyan who made safcon huge has been conned!

Anonymous said...

Standard Chartered is offering margin loans, oh my!!! I hope they really are qualifying their customers, that is a signifacant risk they are adding to their balance sheets.

This would be a good canidate to short.

Cold Tusker please do the blog, it really will help alot of people who need to understand.

A real honest financial advisory firm in Kenya could make a killing by providing basic information on the web on financial analysis.

Coming back home, it really brings it home, that at least for the Kenyan middle class, we are a "deal" culture, and have not developed the analysis based muscles.

Maishinski said...
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Maishinski said...

Since last year I have always maintained that the offer was a con to retail investors:

It is intentionally structured in such a manner as to promote speculation by uninformed investors.

The above is a result of having "advisors" who are stock brokers. They designed it to guarantee a good number of post ipo transactions.

How can you ask a salesman to help you draw your shopping list for products he gets a commission selling????

Doesn't matter if the market is flooded and the price fails to appreciate, the brokers commissions will be HUGE!! Ordinary Kenyans stand to lose - big time!

The 5/= price is the BAIT. Looks cheap doesnt it? Well, "cheap" and "affordable" are two different things.

5/= at 0.05par value means you are actually paying 500/= (yes! FIVE HUNDRED BOB)for each share at a par of 5/= (look at other shares on the NSE). There is no discount - this share is already at a premium! It's not cheap either!

Poor REFUND STRATEGY: Retail investor funds get locked in - potentially destabilizing the economy (people liquidate more assets than they should have or divert cash from productive activities). why couldn't they accept bank guarantees? Its crazy, Sick and stupid.

However there is some growth potential - hence a long term buy. Short term speculators will probably burn.

For long term investors, your best bet is capital appreciation. Dividends will be peanuts. If you get 2 cents per share for your 2000shares, expect a worthles cheque of less than FOURTY SHILLINGS after 1 year.

I bet you could make FAR MUCH HIgHER RETURNS in a year by investing the 10,000/= bob in a vegetable business selling tomatoes or a maize roasting business!

Worse - with our politicians'destructive and divisive politics, Kenya's future is hanging on a thin line... So is "Long term" a strategy or a gamble? Looks more like a gamble to me.

Kenyans (me included) will still buy into this ipo due to the heard mentality that is deeply ingrained in us. Someone in BD likened it to the wilderbeast migration... There are crocodiles and lions waiting on the sidelines: Could be mobitelea, could be vodaphone, could be international investors... so who will be the first to get eaten when the share hits 3/=?

The same HERD mentality got our people foolishly destroying their own sources of livelihood, terrorizing their own children; chasing them from school and murdering their neighbors and friends... neighbors who used to visit them on sunday to watch Reddykulas and laugh together.. etc

Now Kenyans are wondering why everything is more expensive.. where inflation coming from... why we are poorer and worse off, when politicians get RICHER with 40 Cabinet posts... we want to blame it on oil but all we need to do is LOOK IN THE MIRROR!

..what do you expect when you bring down the channels of distribution that were put in place for YOUR OWN BENEFIT (railways, roads etc)????

When will we mature and realize our actions have consequences????

The poor will suffer even more no matter what our politicians get. Certain parts of the country are already considered high risk business locations - even by international investors. This will likely be the case for a long time to come.

Are we so hopeless that we no longer think for ourselves! Must we always remain psychologically enslaved to the West - Shamelessly begging for aid after destroying the little we had?

:-(

Anyway, Lets wait and see... Wish you all the best. I can bet you some fool will miss the point entirely and start blaming PNU/ODM.

inspectordanger said...

Definitely by safcom on long/midterm. Long/midterm here means more than 2 years to 4 years. Offload it before competition and 2012 elections start eating into safcom.

Safcom dividend, I approximated last week as between 10 cents to 15 cents a share. BD confirms this going by last two years dividends.

Anonymous said...
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