Saturday, December 01, 2007

Safaricom is a "made in Kenya", sell it to Kenyans only

Opportunity capitalism needs to be a form of capitalism that Kenya embraces. In every decision, GoK should be ensuring that the benefits, participation of Kenyans 
is as wide as possible.

Its complete horlicks to say Kenya's economy can't handle Safcom OSF. It's like calling you know who the 2nd Mandela. Absolute cobblers.
  • Safcom's OFS might even be a solution to our inflation problem by vacuuming up all the excess liquidity in the economy if there is full subscription.
  • Michael Joseph somehow takes credit for turning the business into a17bn+ profit-taker, but the honest truth is that Kenyans have brought the dough, sugar, water,eggs, flavorings et al mixed up to cook the cake that is now Safaricom. Michael just put it in the oven.
  • The mobile phone sector has invigorated Finland's economy and has seen phenomena growth everywhere even US (despite slow initial uptake due to pagers).Its feeding a necessity that reflects a reality in the world.Today throughout this wonderful world, most families have somebody that lives a distance a way. That means the need for a handy communicator, step forward the mopho.
The 2nd pt as I mentioned is before is that this should be a Ksh60bn float and not Ksh35bn. That way, we'll all get some chance of full subscription. If GoK wants to value the 25% stake higher than that, then we may have to go to to the foreigners.

3rd point, lets do it this year (or at least kick it off) now and keep 2007 business for this year. Next year we can chase up other IPOs. The general election is a one day event. And we had I think three IPO-type events last Dec so the month is a none issue.

Mobilitelea should have been resolved, but somehow nobody went about it the right way which would have been to file a case in the UK as  a Vodafone shareholder.

Bottomline:
Its made in Kenya, its our largest product with 8m customers, Kenya's economy needs more investors and 
savers so lets target at least a 1/4 of these customers to become shareholders/stock investors.

4 comments:

Ssembonge said...

A lot of people will borrow funds to buy into Safcom. I've gotten one request for a soft loan.

Riba Capital said...

I respect your patriotism and I share that we should have this IPO tailored to fit Kenyans needs.
But this might make cold treated by other countries as well when opportunities dryup in Kenya.
So my vote goes to setting up limits to foreign investors and allocating a healthy percentage(e.g. 60%)to Kenyans.

Maishinski said...

Safaricom (Investor Opinion):

Ati 5 bob with minimum 1000 shares? Ridiculous! Is there political pressure or are the transaction advisors a bunch of morons?!!!

According to BdAfrica, we're talking of an additional 1.5 million shareholders in the Safcom Shareholder register.

POST-IPO COSTS:
Has anyone thought of the massive costs of organizing AGMs, Priniting Annual reports, sending out dividend cheques etc? At a macro level, Infrastructural and resource demands for processing a massive number of small value share allocations needs to be thought about!

INVESTOR LOSSES:
Serious investors lose out if all they get is a paltry 1000 shares worth 5000 bob. Even if there is a massive bull run resulting un 500% increase - you only get 25,000 which is nothing to write home about - considering the hype!

CONFLICT OF INTEREST:
Perhaps there is a *conflict of interest* since transaction advisors, being brokers also, know that they will gain more commissions in a volatile secondary market if the number of speculative shareholders is very high! The buy-hold investor is not a stock broker's friend!

REFUND TRANSACTIONS:
Then the number of refund transactions in case of a massive oversubscription will be *mind boggling* - and an unnecessary waste of resources and funds (due to expenses incurred)!

OBJECTIVE ALLOCATION CRITERIA:
IPOs should only be targeted at serious investors - not speculators! The allocation structure should aim to minimize the chances of massive post-IPO refunds which are detrimental to the economy (idle capital).

We need sanity and stability in the secondary market. Considering the high value of the company and the need to minimize refunds, the shares should cost approx 50 bob each and the minimum *value* of shares bought during the IPO should be 100k-200k.

INVESTMENT GROUPS:
This will force jua kali investors to form organized investment groups and minimize risk of instability at NSE due to excessive speculation typically associated with such investors.

HIGH NET WORTH INDIVIDUALS:
We also need to consider "High Net Worth" investors as separate from corporate investors. E.g. our MPs and people like Chris Kirubi.

Minimum allotment for such individuals should be 1-2 Million shillings per shareholder.

ETHICS
The transaction advisors are being paid to do a job - let them do it properly - without turning the IPO into a future commissions cash cow for their own benefit!

pesa tu said...

I disagree, let part of Safaricom go offshore.Here's why safaricom IPO