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Wednesday, January 17, 2007

Safaricom OFS should favour Kenyans over foreigners!

I am disappointed at the gross unfairness of the Stanbic allocations. Kenyans were locked out while Ugandans were heavily favoured.

I propose that in the upcoming IPOs, Kenyans get preferred allocations before any Ugandans are considered. Tanzanians should be barred from Kenyan IPOs.

Why do I take such a stand?

IPOs & new OFS tend to attract lots of Kenyan investors e.g. KenGen, Eveready, etc... so Kenyans should benefit BEFORE foreigners. I am not being xenophobic but the Ugandans did not play fair with Kenyans with Stanbic while the Tanzanians locked out Kenyans from Tanga Cement's IPO.

IPOs esp govt divestiture is at a discount to NAV or market value. Why give away 'free' money to non-Kenyans?
Ug & Tz investors can buy on the secondary market.


Safaricom is coming up... I say CMA needs to address this NOW so that Kenyans benefit first!

14 comments:

damsel said...

completely agree.not a matter of xenophobia.like tuju said consider the citizen first before anything or anyone

Outfoxed said...

If you asked me, I'd say Tz's xenophobia is bordering on paranoia. ....

ct, are you sure they excluded Kenyans from Tanga cement IPO?.... On what basis?
pull up some link to clear the air.

coldtusker said...

Damsel - I believe in free markets so all investors should be allowed if:
1) Secondary market
2) Private IPO/OFS not related to GOK & at a discount

Outfoxed - OK... I was using hyperbole, they excluded ALL foreigners. It hurts coz we are their 'brothers & sisters' in the so-called EAC.

At least UG allowed Kenyans to invest in limited numbers.

Kenyanomics said...

Unfairness in shares allocation goes against the so-called EAC spirit. It also undermines the expediency of an East African Stock Exchange. Why have it if investors from member states will be locked out.

Coldtusker, what’s the possibility of resolving this through allotment agreements, where a certain percentage goes to the privatizing country’s investors, then EAC investors and then internationals. Just like they do with retail and institutional investors.

Just a thought!

coldtusker said...

If they are going to discriminate, then let all & sundry know upfront...

Create classes i.e.
- Class A Employees
- Class B Kenyan Citizens
- Class C Kenyan Residents
- Class D Ugandans
- Class E Everyone else

Kenyans are guaranteed the largest share followed by the rest... If the Kenyans do not take up their %, then share among the others!

Louis said...

i think one can reasonably argue that it would be better for the country as as a whole if foreigners bought Safaricom..... let me wait for the response

Ssembonge said...

With the exception of strategic and security sensitive firms, there is no reason to restrict stock ownership. The capital markets are for raising funds and it matters less if it is money from Zaire or Karatina.

Most countries have prohibitive laws and regulation that make it hard for ordinary investors to participate. In the UK non-residents can only buy shares in the LSE through large IB but not through discount brokers.


However, I would support a move to bar non-Kenyan citizens from buying residential real estate. Their RE prices have rocketed sky high because we have people from all over the continent now involved in RE.

DMX said...

Before we all go red with xenophobic rage, please note that Ugandans were favoured to the extent that they received all the shares that they applied for...that still left 49% of the IPO left over for every one else. Dont be winge unnecessarily.

DMX said...

And actually non ugandan individuals as well as institutions received upto 109,000 shares each: so asks yourself: how many did you get from KENGEN and and even worse- Eveready.

sijui said...

I'm giddy with excitement at the prospect of owning Safaricom shares......happy! happy! happy!

I like Kenyanomics idea......BTW I totally see where the Tanzanians are coming from, I'm not saying its right, I'm just saying Tanzanians have a legitimate gripe that Kenyans have a VERY LARGE FOOTPRINT in the economic affairs of their country. Hopefully Kikwete will motivate them to be less 'timid' in this arena.

Odegle said...

coldi with this post you just betrayed yourself. you need to do a counter post!

Staff Writer said...

coldtusker, kenyanomics,
I disagree. The situation really is not about equals, and successive Kenyan governments have acknowledged this.
We must respect that Tanzania and Uganda bear us historical grudges and that we are set to benefit more than they are( our business classes at least) from the federation and every act of cooperation that we go into.

Not dharau,but we are the big brother here.

emmo
kenyaimagine.com

Staff Writer said...

Anywho, Tale,
I see you are a privatiser. Sadly this is not a solution to our problems, just as it has never been a solution anywhere on earth. Privatisation sure does boost incomes for the business classes, but utlimately there is a large class of left behinds.

I believe it is much more prudent to focus on liberalisation, easing barriers to entry, non-advantage for parastatals, efficiency, non-inteference by government, refereeing by a neutral agency.

Please consider the case of non-privatisation in the Celtic Tiger, or look at the catastrophic future the UK faces now that North Sea crude and the proceeds of privatisations have run out.

emmo
kenyaimagine?

coldtusker said...

Odegle - Please explain...