28 March, 2008


Theres almost an euphoric feel on the first day of the Safaricom IPO. Kenyans woke up early and were seen lining up outside many stock broker offices.They are buying,buying buying notwithstanding a note of caution from the Orange Democratic Movement.Kenyans want to make money.The Safaricom shares seem a good deal following the suit of Kengen and Eveready IPO's .How that turns out to be we wait and see.Safaricom however warns that there's no guarantee as to how the share prices may play out in the long run and certain risks accompany the offer i.e:
  • Litigation currently in the Courts with respect to the offer.
  • Further investigation relating to the Company's shareholding especially sine the Parliamentary Public Investments Committee Fifteenth report on the accounts of State Corporations 2007(the "PIC Report")
  • At the end of the offer the Government will hold 35 % shareholding of the Company, Kenyan Public 25 % ,Vodafone Kenya Limited 40(This is where Mobitelea has a Stake) and therefore the latter may have a larger persuasive share value and may adopt policies or exercise influence that may be contrary to that of other shareholders.
  • Settlement of the offered shares may take a longer period than the 26 days expected.
  • The Company may be unable to fulfill its dividend policy in the future.
  • A future Employee stock option plan may dilute the value of the shares
In light of the foregoing ,the investors whether local or foreign should do so for speculative value but its not a risk free investment just like any other business venture, one can just be burnt.

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