Monthly Archives: April 2008

IPO Guilt

I am

– Guilty of having to get into an IPO queue after signaling a wavering of my IPO strategy (its political season)

– Guilty of waiting till the last minute; procrastination is a Kenyan habit, and the queues of Safaricom are very long in the last 24 hours, despite the IPO having run for almost a month. What were we waiting for? (and does Obama carry this gene?)

– Party guilty of not fully embracing technology: it’s actually possible to buy the shares without having to join a stockbroker queue if (i) you apply online at the official IPO site (which I did) but I did not (ii) attempt to pay via ATM for the same shares. IPO’s tend to run on a different cycle and I didn’t want to be time barred for a delay in funds

More on the official IPO site; it calls for a leap of faith like buying an air ticket online with boarding pass and successfully completing the flight. But the site does not seem to allow for any amendments (buy more or less shares or even cancel an order after you have applied.

And then I received this ominous e-mail from whoever runs the official site

Safaricom IPO”
To: ___________________
Subject: SAFARICOM IPO APPLICATION: PENDING PAYMENT
Date: Thu, 17 Apr 2008

Dear Sir or Madam,

Thank you for your online application for Safaricom IPO shares dated 4/__/2008 reference _______, in the name of ______.

Please note that the next stage of the application process is to make payment for your application at the receiving bank or broker that you selected, by the close of the IPO offer period on Wednesday April 23rd 2008.

If you have already made payment for your application, kindly disregard this email.

In the event of any queries, contact us via email at safaricomipo@swiftkenya.com or call us on +254 20 2754300.

Warm regards
Customer Service Team
Safaricom IPO at Citi

So let’s see how it goes in the last day of the IPO as I pay for the shares.

across the border: Stanbic Uganda, another over-subscribed IPO from 2007 performed even better than expected with a nice dividend of Ug. Shillings 6.64 shillings per share. Maybe I should try the Zambia Celtel IPO too

Motoring Moment

– KQ Plane overshoots runway at Entebbe. No reported injuries

– The Nairobi Star has a story about the Kenya Government not wanting to buy new limousines for ministers and the Prime Minister. Meanwhile the Uganda Government is selling 20 post CHOGM BMW jeeps – why not swop?

Speaking of which, what happened to the stretch limos that former presidents Moi and Kenyatta used to use. They disappeared totally during the first term of President Kibaki – but like with the re-discovery of Harambee House office shouldn’t they make a comeback in 2008?

– Is it a rule that lady drivers in expensive cars must wear monster sunglasses?

– The seat of power in Kenya is no longer back left; but front left next to the driver, then you can have bodyguards or aides in the back

– The latest power accessory is a chase car. Made popular by ministers, but now judiciary, military and even MP’s & civic leaders use them when visiting trouble spots. Saw a military general last month, who has gone the Uganda route – his chase car was a pick-up full of soldiers with rifles

– It is scary to be a Nissan B16 owner – a car can have latest license plates (few weeks old) like KBA111E and already be missing indicator lights.

– Nice to see cars back in the DT Dobie showroom – which had empty windows in January and February. Damage to an $80,000 car is not worth the drive-past display. Besides if you want a Mercedes, you know how to get one, you don’t have to see it.

April 18: Mostly Equity Links

KCB goes payday: with a salary advance product, that mimics one popular, silent, product of Equity Bank – the salary advance loan. KCB’s is up to 100,000 shillings ($1,600) or 50% of salary with no hidden charges – read more on pay day loans

Equity niches: Equity has cut a niche for discovering new products – basically they see a gap and Kenyans with needs and they step forward and finance that need. Where there was no one there, now one can do pretty much anything. e.g Farmers crying about fertilizer costs, next thing, there are equity fertilizer loans for them!

Equity goes regional with the acquisition of Uganda Microfinance Limited: good luck creating a cross-border seamless bank that will enable account holders to transact regardless of countries. Even multi-nationals have hiccups with that.

KPLC extends credit : The KPLC (Kenya Power & Lighting Company) is looking for a bank/MFI to advance 400 million shillings (4 million euros) Electricity Connection Revolving Fund to allow their potential subscribers to pay electricity connection (setup costs) over several months. What are the odds that Equity will win the contract that requires that specifies that the award will go to a MFI/bank that is 10 years old with more than 30,000 active customers, a turnover of 100 million shillings, with 90% repayments and that has been rated by a recognized rating agency in the field of micro-financing/banking?

KCB goes upscale

Joining the exodus of banks leaving the Nairobi CBD will be KCB, who will shift their headquarters from Kencom House to a yet to be complete building in Upper Hill – aka the capital of vision 2030 . They join Victoria, CBA, NIC, the World Bank, and a dozen insurance companies with their own buildings in a great part of town, but with no room for road expansion.

NSE Briefs

Scangroup: It was a pleasant surprise to pick up the newspaper this morning and see results from Scangroup (company earnings usually break at theNSE site) for the year ended in December 2007.

Turnover was up from 3 billion to 4.7 shillings billion, and profit after tax was up from 279m to 353 million shillings (27%) as were EPS (1.48) and dividend per share of Kshs. 0.90 – which is not bad for a share that was oversubscribed 3X just 16 months ago.

KCB: Good and not so good news form the notice of their upcoming AGM (May 9). The company will be cross-listing it shares in Uganda and Tanzania but also proposes to carve out an employee share ownership scheme (ESOP) from the creation of new shares in a proposed rights issue (reserving 150 million of the 400 million new shares). ESOP shares are controversial unless they are bought from the pool of existing, issued, shares.