The Almighty Shilling
When: May 19th, 2006 5:43:34 am - Subscribe
I'm feeling: Rich, Like A Million Bucks
Talk, Opinion, Music, Life, Stuff: Life

Excitement was in the air as the largest IPO (Initial Public Offering) in Kenyan history was launched (The government selling 30% of its stake in the electricity generating company KenGen.) Kenyans, being the people we are, came out in large numbers to buy the shares. I am part of the group that decided to do the patriotic thing and buy into an indigenous company (even if it is government owned.)

What is interesting to note is the large number of subscribers and the places the subscribers came from. For one, the IPO was over subscribed by 337%. The IPO is valued at 7 billion shillings, while the total amount placed was 26 billion shillings. The receiving bank has started the process of returning the extra 18 billion shillings to unlucky investors.

The applications for the IPO came from all corners of the country, and even from outside the country, because of the well coordinated advertising (which was very classy for a government institution). Even those in the remote of remote areas of the country were not to be left behind. Every one I know from all over the country, whether employed or broke, seems to have applied for these shares. Share applications also came in from people and companies outside Kenya, from as far as Bermuda, Singapore, Denmark e.t.c.

The interest in these shares is good because it shows that Kenyans are willing and able to invest in their stock market. It has been suggested that the country needs a second stock market because there is an interest and a market for shares. The Nairobi Stock Exchange actually has one of the highest return on equity investment (say what?) in the world, after the exchanges in Zambia and Uganda. With Nairobi as the financial center of East and Central Africa, it is a good proposition to increase the market space. (It will go a long way in allowing Rich Dad wannabes like me finally reach our dream of financial plenty)

The shares started trading on the exchange at 10 a.m. on 17 May, and was it a free for all, capitalist fight. In a short time, the price had risen from KES 11.90 to 60-something, and then down to 40-something. Clearly, I need to visit my broker to discuss selling strategies.

I have been trying to read on how the stock market works, so I may soon be the next billionaire. Show me the stock exchange!!

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