Ugandans to get sh60b in Safaricom IPO refunds
Jun 01, 2008
UGANDAN investors will receive over sh60b in refunds for the shares they applied for in Safaricom. The East Africa’s most profitable company’s initial public offering (IPO) was oversubscribed by 532%.
By Peter Kaujju
UGANDAN investors will receive over sh60b in refunds for the shares they applied for in Safaricom. The East Africa’s most profitable company’s initial public offering (IPO) was oversubscribed by 532%.
Amos Kimunya, the Kenya finance minister, announced the IPO results over the weekend.
He disclosed that individual investors and companies were allocated 21%, while the institutional investors got 31% of the shares. The IPO received well over 700,000 applications, about 6,000 of them from Uganda.
However, those who were not allocated what they applied for can still buy more when the shares start trading on the Nairobi Stock Exchange.
Ugandans, the stock brokers said, applied for shares worth sh100b.
Njoroge Ng’anga, the head of Dyer & Blair Investment Bank, said the Safaricom results were good news and a demonstration that capital markets can drive the development of the regional markets.
“The Safaricom results clearly demonstrate that there is a lot of money and capacity for the capital markets, not only in Uganda but for the entire region.
“The development of capital markets is the reason behind the growth of many economies and we believe this can be achieved here,†Ng’anga said.
Davis Gathaara, the head of sales and trading at the Kampala-based MBEA Brokerage Services, said they had projected the 20-30% retail allocation.
“We rightly projected the retail allocation and advised that this time unless one was going in long-term and therefore using the refund to re-invest in the same shares, one should not buy to speculate or borrow. It will certainly be a very liquid stock.
“But with at least two more IPOs coming in Kenya in the second half of 2008, I do not expect to see a KenGen repeat and quadrupling of the share price on day one,†Gathaara explained over the weekend.
UGANDAN investors will receive over sh60b in refunds for the shares they applied for in Safaricom. The East Africa’s most profitable company’s initial public offering (IPO) was oversubscribed by 532%.
Amos Kimunya, the Kenya finance minister, announced the IPO results over the weekend.
He disclosed that individual investors and companies were allocated 21%, while the institutional investors got 31% of the shares. The IPO received well over 700,000 applications, about 6,000 of them from Uganda.
However, those who were not allocated what they applied for can still buy more when the shares start trading on the Nairobi Stock Exchange.
Ugandans, the stock brokers said, applied for shares worth sh100b.
Njoroge Ng’anga, the head of Dyer & Blair Investment Bank, said the Safaricom results were good news and a demonstration that capital markets can drive the development of the regional markets.
“The Safaricom results clearly demonstrate that there is a lot of money and capacity for the capital markets, not only in Uganda but for the entire region.
“The development of capital markets is the reason behind the growth of many economies and we believe this can be achieved here,†Ng’anga said.
Davis Gathaara, the head of sales and trading at the Kampala-based MBEA Brokerage Services, said they had projected the 20-30% retail allocation.
“We rightly projected the retail allocation and advised that this time unless one was going in long-term and therefore using the refund to re-invest in the same shares, one should not buy to speculate or borrow. It will certainly be a very liquid stock.
“But with at least two more IPOs coming in Kenya in the second half of 2008, I do not expect to see a KenGen repeat and quadrupling of the share price on day one,†Gathaara explained over the weekend.