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East Africa: Regional Investors Get Guidelines for Safaricom IPO
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Business Daily (Nairobi)
25 March 2008
Posted to the web 26 March 2008
Emmanuel Were
Nairobi
Investors from the East African region, outside Kenya, will have to open an account with the local Central Depository System Corporation (CDSC) to participate in the Safaricom IPO that is set to start in two days time.
The CDSC forms are to be filled in respective countries and the forms sent over to Kenya for the opening of the accounts. This arrangement will favour brokerage houses and investment banks, which have branches throughout the region in the countries.
In Uganda the trading is usually done using certificates and does not have an automated system. Although Tanzania has a CDSC systems, it is not linked to the Kenyan one and investors there will have to open another account in Nairobi.
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Between 150,000 and 200,000 investors are expected to participate in the IPO in which members of the East African Community (EAC) states are being accorded the same status as Kenyan investors in terms of allocation.
This is expected to swell the number of CDSC accounts given the interest from the Kenyan investors who have swamped stockbrokerage firms to open accounts, stretching the capacity of not just the CDSC, but receiving banks and registry services as well.
Dealers at African Alliance said interest in Uganda was broad, with both retail and institutional investors keen, while in Tanzania, only high net worth clients were expected.
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