Friday, November 10, 2006

splits, ipos, bonuses, et all

the market is behaving! i think thats the word. in fact pple in most sites are not asking about company performance, or management style or even industry prospects but rather whether the share will be split in the near future or whether there is a new IPO. others i hear even plan to open an account with family finance in order to be able to buy their shares at first offer. and the directors are all singing encores. splits and bonuses are the order of the day and we are all happy.

even BBK yielded and tried to go the EABL way by being a little mean and doing 1 for 3 and 5 split instead of the 10 that would be more lucrative to speculators. that would mean that if the barclays trades at 600 at the time of the split it would be 120 which is not that 'cheap' anyway. however now eyes are on nation, kplc, jubilee etc since they are too expensive for the poor kenyans.

i have cautioned before and i will do it again, i think there could be money laundering of sorts in the NSE or pple are raising campaign money from legitimate sources such as pension funds by hype and splits. splits make your gains kinda permanent. eg, even if EAC were to go down to 40 bob the real cost would still be 400 bob. still better than the 28 it was a few years ago. to be safe therefore i think retail and even institutional investors need to watch out only for firms with strong financial foundation and good management even though the gains would be low but at least there would be security of sorts. if citi trust is anything to go by, we may be approaching worse days. caution may just be the word.

next week eveready IPO starts, and from the short memory, we know that those things are normaly oversubscribed so most of us will rush there and expect to make quick cash and bolt. long memory however brings to mind sameer africa which traded above its ipo price for the first time this week, KQ which struggled for long, mumias etc. anything can happen in this market. so take care. bottom line its important to know the business and convince yourself that its the kind of business you want to do. is batteries your thing in this industry /country? do you agree with the strategy etc. sometimes it even helps to concentrate on one particular industry say energy and put all your efforts there and so on

odegle tip of the day -- its a folly to try and cash in at the last hour, most times you will burn your fingers and provide fodder to others


  1. Sub-saharan equity markets are now classified as New Frontiers. They are the next hottest equity markets after the Emerging Markets, which are more mature and diversified markets.

    While the overall returns are much higher than in western markets, the risks are equally high. Unknown to retail/public/mwananchi investors, they will be the ones who will loss the most. Fortunately, a lot of the risks are tied to political stability.

  2. Am just sick of the insider information at the NSE. Everyone should trade with public information for a level playing ground. Hope the guys concerned will do something. Make the market more credible and in line with other major world markets.
    What do we call corruption? Acts of traffic police and matatus?

  3. well for me, caution is the word. by concentrating on the solids , you wont have to worry about the crush that much.

  4. The market is for IPOs splits and bonuses.Remember, nobody has ever fought against the mkt nd won.

    Swim with the tide

  5. pesa tu, i will not fight the market. i will just watch it tumble! but i find your way of puting it quite hilarious. short precise and to the point lol.


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