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: ___________________
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

11 thoughts on “IPO Guilt

  1. toiyoi

    I do not think the site did a good job of explaining the steps in an easy and quick way how to go about it.

    Most people would expect that for online system:
    -you place an order
    -you pay online OR you get a # and use this to ref any payment you make at the bank/Broker

    The online payment would make sense more so for those not residing in Kenya.

  2. Maishinski


    1. Apply Online
    2. Print your application
    3. Make your Banker’s Cheque (remember to include extra 30/-)
    4. Attach Bankers Cheque to the Application.
    5. Drop it at your broker (get a copy of both stamped “RECEIVED” as proof)

    That’s it.

    Advantages – applying online means your application is received instantly. The cheque just completes the process. Plus it takes less than 10 minutes in a cyber with a cup of Mocha Late next to you.

    In contrast, when you apply manually, you are at the mercy of your BROKER and his employees. Forms get lost, you stand in long queues enduring heat, sweat, and smelly farts etc…

    Free will. Make your choice.

  3. coldtusker

    So what happens if you pay for your shares BUT the broker (even if the “payment received” is stamped) does not send your payment in?

  4. Maishinski

    Then you can sue the bloody bastard for negligence or contract default… and most likely win damages.

    BUT your best option (to avoid possible hassle of spending years in courts) is to drop off your payment DIRECT at the receiving bank (e.g. Citibank). Then you are sure imefika!

    True, some risks are there – but much less for online applicants.

  5. bankelele

    Toiyoi: I found it straight forward, but it does not tie up in that you can’t revisit your order and amend/cancel it. Anyway I’ll know in a month if I was taken for a ride.
    – online payments are a bit tough to do for any bank in Kenya

    Maishinski: applying online maybe shaved ½ the time I would spend at the broker. Also I’m worried about the people who apply at supermarkets, and hope their forms are not misplaced
    – Can’t sue anyone in Kenya for IPO negligence
    – I don’t think Citibank (Kenya) branches are involved in the IPO, it’s the parent co using other banks

    Coldtusker: In that case, I hope CFC will top me up from their QII pool – since I can prove I paid!

  6. Gitts

    well you can deposit at citibank directly, they have a nie arrangement for companies who are their clients. GOt my CDS account there and bought with no hassles, lines or smelly farts!

  7. Maishinski

    Hi Banks,

    Suing is possible. Prospectus says:

    “Save in the case of negligence or wilful default on the part of the Vendor, their Advisors or any of
    the Authorised Selling Agents, neither the Vendor, nor any of the Advisors nor any of the
    Authorised Selling Agents shall be under any liability whatsoever should an Application Form not
    be received by the Closing Date.”

    Burden of proof is on you to show negligence or wilful default. Hence the need to get proof that your application was received.

    Still, as ODM would tell you, 10 years chasing something in court is not an exciting prospect.

    Actually any citbank branch could have taken the cheques (too late now though!)

    Good luck to all Kenyans!

    Lets spend the next 30 days speculating, analyzing and making predictions on this obsessive IPO.

    International interest in Frontier Markets is growing due to:

    1. The mediocre performance of developed stock Markets.

    2. Saturation and levelling of Emerging Markets

    I know am not selling this share for anything less than 50/= ($0.90)!


  8. bankelele

    tumwijuke: hope you got your application done in Ug

    Gitts: Good to know, but Citi branches are so remote/heavily guarded in Nairobi

    DMX: They mail them in Ug shillings and you bank them localy, they clear in about 2 weeks. They just mailed out the AGM notice this week for May 2008

    Maishinski: You’re right, you may the right, but our courts have no time/justice for investors

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