Initial
public offers of shareholding in most companies in Kenya is done as a way of
rewarding loyal consumers by being part of the companies shareholders .These
public offers of shares has become the in thing in making money by struggling
kenyans.The many stock brokers agents have opened offices to rob Kenyans off
their hard earned cash in the name of advising them, all the small and big
banks, investment companies all concentrate on how to make a kill.
Many
companies have floated their shares both private and public, some have
succeeded and others have fallen apart forcing them to go back to drawing board
depending on the initial amount or the marketing gimmick.
Let me take
you through one that really took Kenyans by storm after a long wait and being
the hope for many, which was never to be.
Safaricom
is the leading mobile service provider in Kenya. It has more than 10million
subscribers according to the C.E.O. late in the year 2007 the shares were to be
floated to the public to a tune of about 2billion shares, but this was killed
off by politicians during the campaigns. The date of IPO was set for 2008 the
first month of the second quarter of the year. All Kenyans from all walks knew
about this safaricom shares and thought that at last the company they had
supported loyally was paying back. They took loans from the banks, welfare
Sacco’s and any other source they could think off just to be part of this.
To
everyone’s surprise this was the only public share offer that opened trading in
stock market at the lowest price of 5/=. Many thought that they were going to
make a kill instead it turned up the shock of the year. Many thought that the
offer will run in the Kenyan stock market and start trading at even triples the
offer price hence making a kill but it came up vice versa.
This was
never to come to light. The safaricom shares have been in the market for about
5 months reading 6/= just a shilling up the offer price, surely what kind of
business is this. Mind you the bank that loaned out money, wants the loans
repaid with interest whether you got the shares or you didn’t. The major
problem was oversubscription of shares by 300% leading to subscribers getting
very few shares like 500 instead of 2500shares applied for.
Many
Kenyans are left in a dilemma because they are indebted and with the inflation
of 30% of basic communities and everyone is leaving on a shoestring budget
leave alone money to pay uncounted loans or debts. Everyone knows how it feels
to pay money or a loan that never went into good use.
I don’t
know what exactly to advise my fellow Kenyans on this kind of investments
because I hope that it was the best lesson ever learnt and they will correct in
future.
