Category Archives: Safaricom IPO

Safaricom 2s

Three weeks after Safaricom’s share price dipped into the 3 shilling range, the share is on the verge of tumbling into the 2/’s [$0.025] – down from the IPO of 5/= and brief high of 8/=.

What are others saying?

Coldtusker points to some deals that can be cut cheaply with NSE shares.

KCIG states that a bear market should be no big deal for serious investors.

Analysts are still producing reports on NSE shares to buy (Access Kenya). What about when to sell?

Everyone’s doing it, so throw more stones at D&B – Dyer & Bair who structured the Safaricom IPO.

Shut down the NSE?: Closing the shares market to salvage what’s left was proposed in Nigeria and now a stockskenya thread has taken it up here as well.

Could be worse: Liquid Trader gives insights on the SA economy that are not easy to decipher by watching CNBC.

Another IPO you say? Co-Op Bank opens tomorrow. No prospectus out yet, but here’s another PDF from the Bank MD.

Looking for work? here’s a great new local Kenya job blog.

Safaricom 3s

Tracking the storm at 7, 6, 5, 4 and now Safaricom at Kshs. 3.70

Mobile notes
– Communications is perhaps the only significant sector that has gotten cheaper this year. Oh yeah also NSE shares are much cheaper this year
– Safaricom is fundamentally sound and performance on the stock market should not translate to the business side
– But Safaricom now has new competition from Zain, Orange and Econet with new offers that may cannibalize each other. Safaricom can’t possibly respond to each marketing overture from the newbies
– Competition will drive increase of (cheap) phone sales as subscribers add second and third phones e.g. Safcom for M-Pesa and Internet, Zain for cheap calls, and Orange for cheap SMS and even cheaper calls
– Safaricom ironically got nominated by Africa Investor Investment Awards for Privatization Deal of the Year ; other Kenyan companies nominated include Alliance for a Green Revolution in Africa (AGRA), the Ministry of Finance Kenya (for Credit Reference Bureau Regulations – relay? Are they original?) Kenya Commercial Bank, PricewaterhouseCoopers, Dyer & Blair, Morgan Stanley (for Safaricom IPO?), East African Development Bank (actually Uganda based), East African Breweries Kenya (for Best Employer), Evelyn Mungai (for Businesswoman, not TI Kenya), Mumias Sugar Company and KenGen (for Carbon Finance)

Take Crash Positions

The Nairobi Stock Exchange (NSE) halted trading today for 15 minutes after the index fell by over 5%. (damn: just as I’m ready to sell some shares)

Elsewhere:

Safaricom: AKS says that pre-IPO shareholders lockout window has ended – so now can Vodafone start buying up some Safaricom shares and stem our losses?

Equihealth while other banks are sleeping, Equity Bank leads the way again this time venturing into health insurance. They have four plans starting as low as 6,700 (~$100 a year that include pre-existing conditions, HIV/AIDS, maternity, dental, eye-disease. (wow, medical insurance is a minefield, but Equity can sets its own terms in the industry and change the rules in the medical insurance industry)

The plans are;

  • Mango @ cost Kshs. 6,700 per person per family for inpatient (Kshs. 13,300 per person for in & out patient), covers up to Kshs. 75,000
  • Passion @ Kshs. 8,500 per family (Kshs. 15,100 per person for in & out patient), covers up to Kshs. 150,000
  • Melon @ Kshs. 16,000 per family Kshs. 27,600 per person for in & out patient), covers up to Kshs. 500,000
  • Apple @ Kshs. per family (Kshs. 35,700 per person for in & out patient), covers up to Kshs. 1 million

Scangroup: (Bharat Bank) As part of the sellout employee shareholders are seeking shareholder approval to sell up to 25% of their shares during the lockup period which is supposed to end in August 2009

To Coop or Not?

The big debate now is if the Co-Op Bank IPO should go ahead this month or if it should be postponed. The Chairman of the Nairobi Stock Exchange has issues conflicting statements on the matter but appears to have bowed to the arrangers and the stockbroking community line that it should go ahead.

IPO’s in London and New York are beign deferred as they are unlikely to be warmly taken up, and here, the dearth of IPO’s in the pre-Kengen was guided by the sentiment that they would not perform well in the then deflated markets. Even the giant IPO of Safaricom – was postponed till after the 2007 elections.

The timing is just not right, with two collapsed stockbrokers still being sorted out, Safaricom refunds not fully reconciled, and the Diaspora who were so enthusiastic about Safaricom still (i) worried about repercussions of the US financial markets turmoil (ii) real estate and (iii) feeling suckered by Safaricom’s post-IPO performance which they heavily invested in.

Though the funds raised are targeted towards, mortgage finance, ICT and branch expansion, the Co-Op IPO should be postponed to at least next year. It withstood the 1998 Nairobi bomb blast and has turned round a Kshs. 3 billion loss to a similar profit in 6 years and a few more months won’t make a difference. But as a fall guy of Safcom, I’ll revert to my IPO bypass plan when the Co-op IPO arrives.

Need for Capital; Co-op is a fast growing bank with a retail and branch base like KCB and Equity that requires capital to be shored up. The two banks that were most in need of regulatory capital – KCB and Housing Finance have already had rights issues in 2008, and other shareholders should prepare for the same at CFCStanbic, Prime, CBA, among other smaller banks.

NSE/CMA to note; In the wake of Crown Berger and Portland Cement share collapses, it should be noted that irregular share trades happen – even to Google – but the prices were re-adjusted and trades made at erroneous prices were then canceled.

Opportunities

Barclays graduate program: The Barclays Graduate Emerging Managers (GEM) is open

US Visa The DV 2010 diversity visa (US green card) lottery kicks off today and runs till December 1

TED Global 2009: Registration for TED Global 2009 at Oxford is open.

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 africanshareholder.com

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