KENYA: Latest share offer in Kenya stokes growing craze to invest in the country's stock market

Thousands of Kenyans braved bad weather and long lines for a chance to make money on Nairobi's stock exchange on Thursday (November 23), a day before the country's latest IPO (Initial Public Offering). The Nairobi Stock Exchange is one of a number of African stock markets that have performed extremely well in the past two years and individual Kenyans have started investing heavily in the bourse. Eveready East Africa (EEAL), a battery and razor manufacturer, on Monday (November 20) offered a 30 percent stake to the public in an initial public offer expected to raise 598.5 million Kenyan shillings (8.45 million US dollars). A total 63 million shares, out of 210 million shares in issue, are on sale, priced at 9.50 shillings each. The offer began on November 13 and ends tomorrow (November 24). Trading is scheduled to start on Dec. 18. "Any profit I can get from the shares to buy food and other things is fine with me," said Jane Njoki, who lives in Nairobi. "I want to buy these shares to add on to those I already have," added Florence Mbuvi, another Nairobi resident. The company is the fourth firm this year to list on the robust Nairobi bourse whose main 20-share index is at an all time high. Kenya's Sameer Group is currently the majority shareholder with 51 percent, Eveready Battery Company USA holds 14 percent and the rest in the hands of local investors. Eveready is the world's third-largest manufacturer of carbon zinc batteries. The Kenyan unit is the leading dry cell batteries maker in the east African region. The company made a net profit of 187 million shillings in 2005 compared with 268 million in 2001. It projects profits for 2006 at 146 million shillings and a dividend payout of 110 million shillings. Kenyan public interest in the stock market surged in May when 200,000 Kenyans bought shares in the country's biggest initial public offering after the government floated a 30 percent stake in KenGen (Kenya Electricity Generating Company). In their market debut, the KenGen shares closed at nearly four times the issue price of 11.9 Kenyan shillings (0.16 US dollars) -- a ringing endorsement of the first privatisation since President Mwai Kibaki's coalition took over in 2002 pledging economic reforms. The listing crowned a successful government campaign to promote share ownership among the wananchi -- ordinary people in Swahili -- that sparked renewed interest in capital markets and drew many investors to the stock market for the first time. "I think what is happening is that as more information comes in the market about investment in (the) market, we expect people to express interest in investing in shares and I think there is no stopping them. We expect people to buy more shares in the future," said Justus Agoti, a research analyst for the Nairoi Stock Exchange. With demand three times the number of stocks on offer in Kenya's first IPO in a decade, the KenGen story has inspired pride among Kenyans weary of press reports about rampant graft, crime and hunger.

ITN Source | November 25, 2006

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