Category Archives: africanshareholder

Facing South and West

With the NSE under water, even lower than the post-election period, it may be time to look West and South for investment ideas. Not too far West, where the US where the financial tsunami is still warming up (threatening to take down Lehman and AIG today), or too far South where it will take some adjusting to Zuma time.

Here there’s some previously unthinkable debate about postponing the Coop Bank IPO and how low the fundamentaly sound (PDF) Safaricom (could) be by the December holiday period.

What’s in store in the rest of Africa?

Kenya: Unilever shareholders have till October 6 to decide if they want to get paid de-list the company.

Togo: According to the Business daily Kenyans may be able to invest in Ecobanks’ rights issue to raise $1 billion. 5 new shares can be bought for every 9 held at $0.29 (~Kshs. 20) per share, minimum 500 shares, and closes October 3

Malawi The Real Insurance Company of Malawi offering of 77.5 million shares at kwacha 2.30 (~Kshs. 1.15) per share, closes on September 19

Botswana The Funeral Services Group offering of 36 million shares at P1.00 (~Kshs. 10) per share. Closes September 22

Insular Tanzania continues to lock out foreign, deliberately including East African, investors from their market, so no thanks!

More at

Plane truth

[image: KQ 777]

Embattled Kenya Airways who are facing local strike threat and customer service issues were ranked No. 93 in Top 100 Airline survey; how did they fare against their regional peers in terms of passengers carried and revenue (euros)?

Airline, passengers carried, revenue in millions of euros
12. Emirates, 21.2 million passengers, EUR 6,801 million
27. Virgin Atlantic —
41. South African, 7.5 million pax, EUR 2,184 million
73. Egyptair 5.7 million pax, EUR 1,166 million
90. Ethiopian 2.29 million pax, EUR 583 million
93. Kenya Airways 2.8 million passengers, EUR 611 million

Safaricom @ NSE Day 3

Wednesday 11/6

8,712 Safariom trades, with a turnover of Kshs. 1.27 billion ($20.4 million)
Price 7.00
High 7.10
Low 6.90
Last 7.00
Shares volume 180,879,400

Commentary: Very constructive session. Market is now underpinned at 7.00, support is 6.65. Demand side was robust today

Courtesy of Rich.Co.Ke [NSE data vendor]

Celtel Zambia:
From Bloomberg reports on day one of Celtel Zambia trading. Celtel Zambia, which sold 1.04 billion shares before listing for 640 kwacha ($0.20) apiece, climbed as much as 85 kwacha to 725 kwacha, according to Lusaka Stock Exchange data.

Safaricom @ NSE: Day 1 and Day 2

Day One
Shares Traded; 416.3 million
Value in Kenya shillings; 3.061b [Just under $50m]
Hi 13.70 [probably across the books]
Lo 6.95
[Market had 13m shares at 7 shillings on the offer at the close]
Average price 7.35.
Commentary: This is an entry rather than an exit level.

End of Day 2-Tuesday 10/06/08
Total deals 3375
Turnover 885.2 million shillings
Avg price 6.95 [closing]
High price 8.00
Low price 6.65
Last price 6.85
Shares traded 127.3 million Commentary: It has based out at 6.65, I think. What I have noticed in Kenya is that everyone tries to get in at the bottom. So tails tend to be fatter. At these levels, this is a steal on a medium-term view. International Investors were heavy Sellers at around 500m shillings worth. Counterintuitively, that’s a positive because they will have to own the stock [because of its market capitalisation] and will also join other Buyers, at the turnaround.

Courtesy of Aly Khan Satchu

Celtel Zambia: Prospectus Peek

After taking a peek at Safaricom prospectus, take a look at the Celtel Zambia one (Thanks M for mailing it in) with two weeks to go in the calendar.

January 2008, showed that cross-border diversification may not be a bad thing, even for Kenyans – and if you have the money and the chance, you should do it. Stanbic Uganda has performed quite well, though the weakening Uganda shilling eats into improved dividends.

In this IPO, retail investors from outside Zambia are not included, nor are there provisions for other country nationals except as international institutional investors. For Kenyans who take part, we are one of the countries who have double tax treaties with Zambia – hence reduced tax on dividends. However Celtel has never paid dividends as it has ploughed back all profits into operations.

Comparing mobile giants: it’s best to compare Celtel Zambia to Safaricom Kenya as they are both market leaders and backed by multinational mobile partners. Zambia is larger than Kenya, but with about 1/3 of the population (12 million) Celtel Zambia has about 1.9m customers representing 78% market share and covers 71% of the country (Cell Z and MTN are competitors). It had 2007 revenue of $252 million and an average monthly ARPU of $13 – similar to Safaricom’s (~800 shillings per month).

Beneficiaries: While the benefits of safcom went to the Kenya government, the benefits of this (sale of 20%) will go to Celtel parent. Stanbic bank are also going to do well as lead manager, distribution agents and one of the receiving banks. IFC owns 10% of the company and is expected to sell its shares after the IPO which itself costs about $5 million.

On offer: 1 billion shares on offer at 640 kwacha per share ($0.18 or Kshs. 11.50). The minimum subscription is 700 shares (about 8,000 shillings). Employees get a 20% discount on the price.

Directors: A Kenyan connection is former PS (part of 1990’s dream team) and IFC executive Mwaghazi Mwachofi on the board of Celtel. It is refreshing got see that all directors other portfolios are listed in teh prospectus and that they have to declare that they have not censured/criticized by any regulator/ authority or been involved in bankruptcy, or liquidation.

Management fees: The company pays between 3.6% and 4.8% of annual revenue to Zain/Celtel parent. Safaricom pays Vodafone 0.5% of revenue and 6% of procurement costs as what has been a sensitive issue for the company but seems to be the norm with multi-nationals.

Stock exchange not retail or liquid: Zambian exchange appears not to be very liquid – it has 9 listed companies worth $100m, and $72m worth of deals were done last year in just 6,196 trades. The listing of Celtel should improve those numbers.

Regional IPO Tales

Undugu gani huu?: One of my favorite entertainment sites is Bossip with its catchy headlines, like Making it Rain on These ****, Jesus Take The Wheel, and ** sit down, all of which apply in this case, but the best way to answer this story is BROTHER PLEASE! – while Uganda and Rwanda have joined thousands of Kenyans embracing the investment vehicle that is the Safaricom IPO, it appears the Bank of Tanzania is preventing Tanzanians from buying shares in Safaricom through the Dar es Salaam Stock Exchange. (hat tip RO)

Africa investment resource: is a great site to keep up with investment happenings in Africa.

Celtel IPO On: Sadly, not in Kenya, but in Zambia starting at the end of April – with 20% of the local subsidiary on offer.

Executive privilege: one reason that ministerial seats/portfolios are in great demand in Kenya is the power that comes with then such as the authority to insert one’s buddys’ names on state corporation (parastatal) boards and these become law once they run in the weekly Kenya gazette. Sometimes one can even create new boards such as the new Brand Kenya Board which has been formed to market Kenya in the fields of tourism, investment, creditworthiness and international relations.