Kenyans dash for Safaricom shares

At the Nairobi Stock Exchange (NSE), traders are selling shares in a frenzy and dashing for the Initial Public Offer (IPO) of Safaricom, Eastern Africa's largest GSM (Global System for Mobile Communications) company.

The government is offloading its 60 percent Safaricom stake -- 10 billion shares -- to the public at the cost of 5 shillings (US$ 0.08) each. Traders are selling other stocks to raise money to participate in the offering and cash in on the company, which reported 17 billion shillings (US$262 million) in profit last year.

The offering period began on March 28 and is due to close April 23. Applications for share ownership can be made online at the official IPO (initial public offering) Web site, or through paper forms at brokerages.

The IPO broke the monotony of political discussions and peace demonstrations in the county. Long queues to brokerage firms and investment banks have become the norm in Nairobi, as people travel from rural areas with the hope of making money on the IPO. A group of registrars will oversee the process of apportioning the shares on a pro-rated basis if the IPO is oversubscribed, as expected.

Local and foreign investors have responded favorably to the online service, according to data collected from independent Web site monitors. Nearly 400,000 Internet users have visited IPO Web site. This is the first time IPO shares are being traded online in East and Central Africa.

According to Internet monitor service Alexa, the overwhelming majority of visitors to the Web site are from Kenya, the U.S., Australia, South Africa, United Arab Emirates and Zambia. Analysts expect over 1 million local applications for the share offer, representing the largest ever pool of investors to take part in such an offering.

Safaricom Chief Executive Officer Michael Joseph said the company is investing in new technology in order to deliver unrivalled services. The company is also opening a call center to deal with the rising number of subscribers. Safaricom has over 7 million subscribers while Celtel, the local rival, has 4 million subscribers.

Safaricom is owned by the government, through the state-run Telkom Kenya, and Vodafone Kenya. Through a stake in Vodafone Kenya, a company called Mobiltelea also owns part of Safaricom. However, Mobiltelea's participation in Safaricom has been mysterious -- Vodafone Kenya has not answered calls to divulge who owns Mobiltelea.

The mystery of Mobitelea has led to calls by opposition politicians for a boycott of the IPO until its owners are known. But the public, thronging to Nairobi to apply for ownership, seems to have ignored the calls.

Regina Matu, a sales person who took a bank loan to buy the shares, says that Safaricom is a sound company and calls for a boycott are misplaced.

"I am buying the shares for long-term investment. To me, it does not matter who Mobitelea is, I am concerned with owning the company," she said.