Great Stock Debuts on the Nairobi Stock Exchange

[AbdiWahab252]

Safaricom, Kenya's largest cell phone provider had its IPO today. Its being bought up like hot cakes, at start price of 5 Kenya shillings ($0.07), its a bargain. Last IPO I got on the NSE, Kenya Airways quadrupled in a few months.

http://money.cnn.com/news/newsfeeds/art ... 000446.htm

[Executive]

Thats not a bad investment



I just looked at their Profit + Loss and Balance sheet. http://www.safaricom.co.ke/index.php?id=437

[AbdiWahab252]

Executive,

There is money to be made in investing in African companies.

Safaricom is great because:

1. Government backed

2. Cornered 80% of the market

3. Kenya has a huge market


Kenya Airways started at about 20/- and quadrupled in less than 6 months.

There was also Tanzania Breweries which had an IPO at 100/- and shot up to 1,100/-

[Aerosmith]

Yes finally Safaricom IPO debuted in Nairobi today, but sadly to foreign passport holder Somalis it might not be a good option. Firstly its payment upfront and not payment on allocation of shares.

Local investors who happen to be mainly speculators got the chunk of the shares with
6.5 billion Shares allocated to them. Of these, retail individuals got 3.38 billion shares, minimum lot is 2,000 shares. Qualified institutional investors like insurers, pensions and other entities recognized by the RBA (Retirement Benefits Authority) got 2.73 billion shares, their minimum lot being 100,000 shares, then 10,000 after that. Authorized dealers/brokerage firms 130 million shares, minimum 2,000 shares. Safaricom employees 260 million shares, minimum is 2,000.

International players get 3.5 billion Shares and are targeted at long term investors. I would expect they would have lock-up period for them, but not sure. 30 million shillings or US$ 475K per order minimum and this price is set by book building ( like bond auctioning) and managed by Morgan Stanley, the lead international advisor.

Given safaricom's good fundamentals and the fact that most local retail players will be speculative, a good bet would be to buy on debut if you don't get a good share allocation. I suspend there will be post IPO-dip on launch and most holders will be selling. Five years hold should be alright for risk averse foreign investors.

Somalis should try to buy as local investors through their relatives or associates. I hope to get hold of the prospectus tomorrow and will update.

A/Wahab and Executive-are you guys looking into buying shares.

[AbdiWahab252]

AeroSmith,

Not likely. But I am not sure if my investment group is.