Walter Menya And Joseph Bonyo
23 April 2008
Nairobi — Thousands of investors thronged stock brokers' offices and banks on Tuesday in a last-minute rush to beat the deadline of buying Safaricom shares.
Nakuru investors queue outside a stockbroker's office to buy Safaricom shares before today's closing deadline. There were also long queues outside banks as town residents and others from rural areas poured into the town to buy the shares. Photo/ JOSEPH KIHERI
The Safaricom initial public offering (IPO), which has been described as the biggest in sub-Saharan Africa, closes at 3pm today.
Long queues began forming in many towns as early as 7am as investors rushed to take up some of the 10 billion shares previously held by the Government in East Africa's most profitable company.
At Kisumu's CFC Financial Services office, branch manager Paul Oketch described the last-minute dash as having "overwhelmed" his staff.
He said they had been forced to change their strategy in the last three days of the IPO period to serve the clients.
"It started on a low note but the mood has changed and we are getting more people," said Mr Oketch.
He said the Kisumu office had so far received more than 9,000 applications, with over 500 people expected to line up for the shares today.
Mr Willis Owaki of Discount Securities Ltd, Kisumu branch, described the demand as "massive".
"Most people like the last-minute transactions, with the experience of past IPOs being a good reminder of this trend," he said.
Similar scenes were seen at Equity Bank branches, with many customers lining up for the shares.
Mr Owaki feared that the IPO could be oversubscribed by more than 100 per cent.
"Kenyans have forgotten politics and now want to invest. This is why they are coming in thousands to apply for the shares that could push the oversubscription index by two or three times the offer," he said.
Stock market
The Government offered to offload the shares late last month after protracted court battles with opponents of the IPO.
The shares are selling at Sh5 each, with investors required to buy at least 2,000.
It is expected to bring in about one million new investors to the stock market.
Earlier indications were that 1.85 million investors had already placed orders for the shares. The number is expected to go up substantially, with estimates that a larger number of applicants has rushed for the offer during its last days.
In previous offers, 70 per cent of the applications were received in the final days.
Speaking at the Nairobi Stock Exchange offices, Mr Bob Karina, the chief executive officer of Faida Investment Bank, confirmed that the process had recorded numerous applications in the last days.
"We started out on a slow note. However, in the past few days we have seen impressive numbers as people come out to place orders to beat tomorrow's (today) deadline," said Mr Karina.
Faida Investment Bank is part of the consortium of transactional advisers to the Government on the sale.
Selling points
The offer opened on March 28 at a function attended by President Kibaki, among others. It is expected to bring additional Sh200 billion to the NSE market capitalisation.
Currently, the NSE capitalisation is estimated at between Sh700 billion and Sh800 billion.
By yesterday afternoon, investors were still queuing at various selling points to place orders for the shares.
A spot check by the Nation revealed that commercial banks had set up specific counters for the offer to handle the high number of clients.
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