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Kenya: Citizens Troop to Zambia in Search of IPO Fortunes
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Business Daily (Nairobi)
19 May 2008
Posted to the web 20 May 2008
Emmanuel Were
Nairobi
The Celtel Zambia initial public offer, which closes today has attracted Kenyans despite initial fears that the just concluded Safaricom IPO had locked investor's money.
Peterson Mwangi, Director of Afrika Investment Bank which participated in the Celtel Zambia IPO puts the amount received from investors within a week at a minimum of Sh5 million.
"You should not underestimate the wealth Kenyans have," Mr Mwangi says.
Sterling Investment Bank, which was also processing the IPO, said they have received at least Sh8 million during the week.
Kenyan individual investors have been investing through pooled funds set up by investment banks since the offer for sale of shares is not open to foreign institutional investors. Local investment banks which were participating in the offer had to finalise their paperwork over the weekend.
On offer are one billion shares, 20 per cent of Celtel Zambia, at a price of Zambian Kwacha (ZMK) 640 or Sh11 at current exchange rates. Applications for the ordinary shares were for a minimum of 700 ordinary shares and thereafter in multiples of 100 ordinary shares.
Results of the offer are expected to be on June 10 and refund cheques, if any, are to be sent on the same day. The shares are to list on the Lusaka Stock Exchange, LuSE, on June 11.
Analysts said short and long term positions, once the shares list on the LuSE, were of sound strategy.
"Whichever strategy you pick you can not go wrong," says Justus Agoti a research analyst at Sterling Investment Bank.
Latest figures on the subscription levels of the Safaricom IPO, which closed last month indicated that local investors had applied for shares valued at Sh115 billion. Analysts had warned of subdued investment activity before refund cheques were disbursed on June 9.
Housing Finance and KCB Bank read the signs opting to sell additional shares, through a rights issue, when refund cheques hit the market.
In a comparison of the stages in growth for Celtel Zambia and Safaricom, Mr Agoti places Celtel Zambian two years behind Safaricom whose offer for shares closed on April 23.
Mr Agoti said the Zambian market was similar to Kenya's, with the three players there recently introducing value added services like money transfer, internet and video.
Celtel Zambia, a subsidiary of Celtel International, controls 78 per cent of Zambia's market with 1.9 million subscribers at the end of last year out of a population of 12 million people.
The mobile penetration rate in Zambia was estimated at 20 per cent by the world cellular information service. Credit Suisse, an international finance services group, says in a report released last month that it expects the average penetration rate in African countries to increase from the current 27.6 per cent to 45.5 per cent in 2010.
Following the interest generated from the IPO, Afrika and Sterling investment banks have cast an eye on opportunities across the continent where they can channel investments.
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National Microfinance Bank Limited in Tanzania and the Nigeria Reinsurance Corporation are just two of the initial offers expected later this year.
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