The delay in floating Kenya Re is causing more questions in addition to what bloggers and investors have asked before. the loud silence and the seeming lack confidence in the part of those handling this issue is not helping matters at all. maybe there is fear that institutional investors may not been keen on this offer which would deal a deadly blow to the firm. the effects would be worse than those of Eveready. Eveready has followed sameer, another merali firm which has perennially traded way below its IPO price. But if Kenya Re also fails to get suitors then the government may be forced to put its offers on hold maybe till the monster of election goes away. but that would be a two edged sword in that elections are rather unpredictable and the govt of today can easily become the opposition of tomorrow. its also looking rather certain that even if the head of state achieves his personal victory, most of his foot soldiers will definitely fall by the way side and this time he will end up with a worse hung parliament than what he has now. most of his octogenarian friends may also fail to cross the murky waters come December and the old man would be surrounded by ambitious, hungry young politicians with no respect for tribe.
If that happens then some of the economic policies including sale of some of these parastatals may prove quite difficult. I would think that if indeed the government wanted to sell then the best time would be now. waiting waiting hurts the tummy so the sages say! we waited too long for kencom and kengen. I also look forward to a speedy decision on sale of safaricom to the public.
on another note, its a wonder that Access Kenya took off to a rather slow start but looking at where the continent is going, AK looks like a growth company. forget about the current statistics on the firm. its in the correct segment and good tidings are expected. IT and energy are the segments to watch right now especially in Africa and since the price is this low, this is a counter to position in.
The longer they put off Kenya Re, the more suspicious one is getting. That ksh300m receipts that are missing may just be the tip of the iceberg. It also reduces the chance that other IPOs will happen this yr.
ReplyDeleteStrange about Kenya Re. There was a story in the business daily yesterday about approvals not having being received from the CMA. Kenye Re's advsisors must be working fulltime to recalculate and draw new prospectus (just a month ago they has to cancel attempt to stuff defunct Kenya National Assucrance into the IPO) - but the longer it takes, the more (instituional & financial) investors are to look at it as a lemon
ReplyDeleteThe IPO should be called off till Kenya Re cleans its mess...this might take a long time. Its wrong to invest in a company only to see the share prices to go the eveready way.
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