Kenya - Safaricom

Safaricom share frenzy

Kenyans lined up in their thousands yesterday to subscribe to the eagerly awaited share sale of Safaricom, a mobile phone operator part-owned by Vodafone that is set to be the biggest listed company in east Africa.

The offer period for the company, which has been valued at $3.1bn, opened on schedule in spite of Safaricom's last-minute entanglement in a political dispute within Kenya's new power-sharing government.

The government's sale of a 25 per cent stake in the company has reignited Kenyans' love affair with the stock market, which began with another privatisation in April 2006, but lost some of its fizz last year. "The sense of euphoria is incredible. The country's gone share mad," said Aly Khan Satchu, a stock market analyst in Nairobi.

The company is due to list on the Nairobi exchange in June and up to 35 per cent of the shares will be made available to overseas investors. The level of demand will indicate how sentiment towards Kenya has been affected by the post-election unrest. Most overseas interest in the company is expected to come from fund managers specialising in Africa and other emerging markets. The international part of the offering is being managed by Morgan Stanley.

The government is selling 10bn shares at a base price of KSh5 a share and 65 per cent are set aside for domestic investors.

The government has a 60 per cent stake in the company and Vodafone owns 35 per cent via an entity called Vodafone Kenya. The remaining 5 per cent is held by Mobitelea Ventures.

This week Kenya's opposition party, frustrated by stalled negotiations over the naming of a coalition cabinet, called for the share offering to be delayed. It raised questions over Mobitelea and suggested that some politicians would be "unlawfully enriched" by the flotation, but did not provide any evidence.