Tuesday, January 09, 2007

IPO Watch: Kenyan Investors Stalk Safaricom Shares

Brace yourselves for another Kengen-style IPO frenzy. Kenya’s most profitable company, Safaricom, is headed for a listing on the Nairobi Stock Exchange this year.

Safaricom is the larger of Kenya’s two cellular providers, boasting 5.3 million subscribers. It is a joint venture of government-owned Telkom Kenya (60%) and Vodafone.

As I write, the Kenyan government is in the midst of negotiations with Vodafone, that, if successful, could fast-track the IPO. At issue appear to be the size of the stake offered to the public and Vodafone’s “pre-emptive” rights over the sale of shares.

In any event, the company’s future looks bright. It will soon launch a new service called M-Pesa. M-Pesa will allow people to send and receive funds via their mobile phones. Initially, the service will only be available in Kenya, but Vodafone promises that it will eventually go global.

This could be truly revolutionary for the African diaspora. People could send money home to family or friends with just a few clicks of their mobile phone.



Anonymous said...

While I can see the use of the cell phone as a mode of commerce in marginalized areas, I don't think people will widely embrace the idea of using the same technology for remitting money.

We are also assuming that banks will do nothing to make it easier to transfer money. Because of banking regulatory hurdles and the need for VOD to focus on growth of it's core business, I don't see any prospect for this service. At least, not in the US or EU.

Anonymous said...

ssembonge - It is a disruptive technology & it will work as long as fraud is kept at bay.

I do not think Safaricom will be able to list unless Vodafone agrees. Vodafone has pre-emptive Rights that they exercise every 30 days thus stymieing the government.

The political ruling class wants to float Safaricom in 2007 to help pay for the elections as well as create a feel-good among Kenyans who then will vote for the status quo.

The issue of Mobitelea is still open & I hope someone looks into the matter.


The news on the stock sounds great.