Sell-Offs At NSE As Market Eyes Safaricom IPO in Kenya

Mergers, Acquisitions and Financial Results

Whispers that the landmark Safaricom IPOs offer date is expected sometime towards the end of March is already causing quiet ripples at the Nairobi Stock Exchange (NSE) with dealers noting an increase in sell-offs by retail investors in readiness for the offer.

"There has been a substantial amount of supply of shares at the stock market since trading commenced this week," says Eric Ruenji, chief dealer at Sterling Securities Ltd. He added that individual investors in particular were taking profits or selling shares at lower prices on rumours that Safaricom's offer date will be at the end of the month.

Last week the number of deals struck rose by 31.17 per cent from 18,927 to 24,826, while, the level of market capitalization rose by 3.64 per cent from Sh830 billion to Sh860 billion.

The pricing of the Sh55 billion sale is expected to be discussed as soon as the actual date is known.

Offer prices ranging from Sh3.50 to Sh5.00 per share have been mentioned and are seen as increasingly likely as the country seeks to restore investor confidence following the political crisis.

One reason for heavily discounting the Safaricom share offer was to ensure nationwide take-up of the offer by an expected 2 million local investors.

Stanbic Investment Management Services says in quarterly report that the key factor to success would be the capacity of local stock investors to put recent events behind them and take up Safaricom like they did KenGen in 2006.

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