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Kenya: Safaricom Shares Attract Thousands
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The East African Standard (Nairobi)
29 March 2008
Posted to the web 28 March 2008
Kimathi Njoka And Steve Mkawale
Nairobi
Hundreds of investors flocked stock brokerage offices and banks to purchase the much publicized Safaricom shares.
In Nairobi, queues of potential investors formed outside offices brokerage firms seeking to fill forms of the Safaricom Initial Public Offer.
Similar demand for the shares was witnessed all major towns.
At the Discount Securities offices located at Merica Hotel Building along Kenyatta Avenue, prospective investors queued for hours to buy shares.
"I want to buy shares and sell them once they appreciate," said Ms Dorcas Wamaru.
Many braved the chilly morning weather to buy the shares.
"They are coming in large numbers and we are advising them on what they need to do," said a broker.
At Equity Bank, the situation was the same.
A number of those interviewed said although there was controversy over the sale of the shares, they hoped it would be resolved.
"We hope we are not dancing to the tune of some conmen out to swindle the Government," said Peter Momanyi, a street trader.
"I have borrowed money to purchase the shares and then resell them once the price goes up and I return the borrowed cash," said Ms Milly Adhiambo.
Over 100,000 new investors have opened CDS accounts to participate in the region's largest Initial Public Offering (IPO),
The additions bring to over 900,000 CDS accounts holders.
Finance minister, Mr Amos Kimunya is however optimistic that the IPO will net more investors into the capital markets going by the current investor interest.
And with the anticipated surge in the number of investors, Kimunya says the Company Act ought to be amended in time before Safaricom holds its first Annual General Meeting (AGM).
"We are working on amending the Company Act to allow electronic participation in AGMs by shareholders," said Kimunya.
The amendment will allow electronic participation by shareholders in AGMs without having to physically attend.
This will save companies costs of publishing annual reports and hosting shareholders in AGMs.
Capital market
The need to amend the Act came to the fore following the first KenGen AGM that netted over 400,000 new investors.
The move if realised could save Safaricom tens of millions of shillings as its expected to net over a million shareholders.
The offer price of the Safaricom IPO at Sh5 per share is the lowest ever, and represents a 14 per cent discount on the actual book value, implying Safaricom has an equity value of Sh200 billion.
Kimunya said the offer is expected to deepen the capital market by over 25 per cent.
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"The market capitalisation, currently stands at Sh800 billion and is set to surpass the Sh1 trillion mark after this offer", said a beaming Kimunya.
The shares will be sold in two categories; domestic and international pool.
The domestic pool will enjoy 65 per cent shares and will include the entire east African community citizens and the international pool will be specifically be restricted to foreign institutional investors.
Being away from home can be apain when you want to accomplish something and the system is not willing to help. I sent all documents required to allow me buy safaricom shares, but the photos did not make it. I scaned and e mailed the photos and assumed since time was running out i might beat the deadline, but well i have been told only actual photos will work. If it was me on the other end i would have at least done something to assist. Any way jambo kenya.
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