Tuesday, July 15, 2008

Info: Safaricom & Brokers

They say knowledge is power and never more so than at the bourse.

Kudos to Nation for publishing this list of the FFIs who applied for Safaricom shares. Clearly someone at Morgan Stanley International has dealt with adverse publicity before and knows that you don't sink head first into the sand at the first sign of trouble. Funnily enough, rather than disapprove that Alcazar Capital didn't get a huge allotment of shares, the information showing that Morgan Stanley International got almost 10% of all shares that were being listed is almost going to open a proverbial can of worms. MSI didn't get these shares for itself. That much you can bet on. It'd have done so on behalf of unnamed clients (primarily the HNW ones). Which is where Alcazar comes in.

Thanks Ssembonge for bringing this to my attention again. I had seen previously it but thought it was just for beginners. One piece of nugget stood out though. The information on broker capitalisation. Based on the new CMA proposals that were announced as part of the budget, all brokers must have capital of Ksh50m or more and Ksh250m for ibanks. On those two measures:
Brokers: Sterling Securities fall just below and Discount confirm all those rumours about its being weak. Given the amount of business they transacted in 2007, Ksh30m is nowhere enough. I am willing to bet that Francis Drummond (correction its an ibank), Crossfield, Ngenye Kariuki and possibly Bob Matthews also fall below. Crossfield are already a takeover candidate for Tsavo Securities which wants to convert into an ibank. Bob Matthews (already doing with DTB) and FDs' turnover suggest they should both look for a banking partner.

Ibanks: All but D&B, CFC and Standard Investment Bank are well below the Ksh250m threshold. Some such as Suntra are already doing private placements, but 4 others may need to bring in new shareholders or look for anchor shareholders in the financial sector. My preference is that they do private placements and give Kenyans to own a piece of ibanking.

2 comments:

Girl In the Meadow said...

Just to let you know that Francis Drummond is actually an Investment Bank which goes by the name Drummond Investment Bank. The error by the Business Daily which actually meant Francis Thuo.

MainaT said...

GiTM, noted, lakini that doesn't change the comment. Given its been in the market for long (its the oldest broker in the NSE), its market share makes it non-viable as a long-term standalone business. And its problems are re-known...