The financial part of the day is over with no announcement on the start of the Safaricom IPO; when it comes, should still not matter as chasing an IPO is a futile matter for a savvy retail investor. This is how it works – buy the shares after they list, not by queuing for hours around the block only to get 50 shares and 90% refund cheques.
All Kenyan IPO’s priced at less than 10 shillings have been greatly over-subscribed and this one which falls in that range could be the biggest.
So wait for the shares to list, and then buy. They may be floated at 10 shillings, and open at 25 – but have you lost anything? Not if you and 300,000 other shareholders all start off with 50 – 100 shares each. In fact you have a head start as you will have your money ready while the others wait for their refund cheques to be processed
What else to do;
– Buy through an investment club or a company if those groups get preferential allocations
– Buy other shares that may drop in price
– Marry a Safaricom employee, or better yet – get a job there and apply through the employee pool
– Use a reputable stockbroker stockbroker or bank
What not to do;
– Don’t take a loan to buy IPO shares.
– Don’t buy through multiple names/relatives/companies – you’ll have to chase a refund for each and consolidate after.
– Don’t wait for the Econet option – I’ve being writing about their launch/imminent rollout in Kenya for as long as this blog has existed
That’s what I’m doing: any other suggestions for maximum returns?
Ooops, spoke too soon – sorry Mr. Minister
Kenya sets Safaricom IPO share price at 5 shillings
NAIROBI, March 14 (Reuters) – Kenya is to offer a 25 percent stake to the public in leading mobile phone operator Safaricom at 5 shillings per share, Finance Minister Amos Kimunya said on Friday. Kimunya said the offer would open to the public on March 28 and close April 26. There will be 10 billion shares for sale. The proposed Safaricom sale may prove a key test of domestic and foreign investor confidence in east Africa’s largest economy after negative effects of the post-election political crisis. (Reporting by George Obulutsa)
Still the math does not change. Assume a realistic 3 million shareholders, they can each get 3,333 shares each at a cost of 17,000 each – still means over-subscription, and that does not factor in any preferential allocations for corporates and employees, reducing the pool