Safaricom shares sell strongly in Kenya
Thousands of Kenyans have been lining up to buy shares in Safaricom, the country’s largest mobile phone provider.
Safaricom, Kenya’s largest mobile phone provider, is selling 25% of its stock in the biggest Initial Public Offering (IPO) in sub-Saharan Africa.
Kenyans have been queuing up in their thousands to subscribe to the eagerly awaited share sale of Safaricom – the mobile phone operator part-owned by Vodafone set to be the biggest listed company in east Africa.
Ten-year-old Safaricom is the most profitable firm in east and central Africa with 2007 pre-tax profits of $370 million (£187 million). Shares are expected to be snapped up quickly at an opening price of 7.5 cents.
The state is selling off 10 billion shares, representing 25% of the company’s equity, and valuing the company at 200bn shillings to raise 50bn shillings (£395m, $780m).
The Kenyan government has a 60% stake in the company, Vodafone owns 35% via an entity called Vodafone Kenya, and the remaining 5% is held by Mobitelea Ventures, a Guernsey group.
Kenyan President Maim Kibaki launched the sale on 28 March, saying: “I, therefore, wish to take this opportunity to invite all Kenyans, both in the region and diaspora, to take advantage of this investment opportunity and take part in the success story that we have created together.”
Valued at $3.1bn (£1.6bn), Safaricom is due to list on the Nairobi exchange in June and up to 35% of the shares will be made available to overseas investors through Morgan Stanley.
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It is nice to read about the safaricom share sales on the ICM website.
As a Kenyan residing in Nairobi, I can confirm that many Kenyans have been educated that they can create wealth through the stock market. As such, the safaricom share sales present a perfect opportunity for the wealth-thirsty individual to take a shot.
A lot of young people, especially college-going students, are excited about the sales and so far constitute a larger percentage of those seen queues. They see this as a launching pad for their future investments. The price is within the reach of many locals.
As expected, there will be a massive over-subscription, which will disappoint many locals. The 35% shares reserved for the foreign investors should then be returned to local investors at the IPO. The foreign investors wanting to put their money in East & Central Africa’s most profitable company can buy from the secondary market.
For the moment, I would urge both local and foreign investors to put their money in safaricom. It is safe and prudent buy.
Alloyse Mirindo
April 2nd, 2008 at 8:01 amICM Regional Director for Africa
As a matter of fact, the shares are a real business opportunity for all Kenyans - young and old - but it is my feeling that due to the fact that these chances don’t come easily, the government should have allowed young youth in secondary schools to invest with school IDs, rather than insisting on national IDs, which seems some kind of discrimination.
I’m a Kenyan living in the UK and thanks to Equity Bank, it really made our lives easy to buy and we all encouraged each other. I hope this happened all over Europe and the US - giving Kenyans a chance to tell the world we are back.
Thanks Max.
April 15th, 2008 at 10:04 pmam a college student and am thrilled at the opening of the stock.am looking forward to buying myself some shares.grants to safaricom.
September 15th, 2010 at 1:23 pm