Court Allows Kenya Re IPO to Continue

The court yesterday allowed the Kenya Re IPO to continue by throwing out a court suit filed by a one Mr. Apollo Mburu Gichuhi on behalf of the collapsed United Insurance policyholders.
Prospectus:
The prospectus was released to the public though there were concerns that the vendor did not make public the forensic audit report that tried to delve into the corruptions allegations at the company. The prospectus said that potential investors can pick up upto 16 documents for inspection from the company head office though many feared that the audit report might not be among them.

IPO Debut:
The Kenya Re IPO, which debuted in the primary market yesterday, offers investors a chance to buy a stake in the company at a price of Sh9.50 per share. The offer draws to a close on July 31, with trading at the Nairobi Stock Exchange set to commence on August 27. The IPO involves the sale of 240 million shares valued at Sh2.3 billion to the public which is equivalent to 40% of the company.
The company assets are worth 12.8B. The company in the last financial year made a pre-tax profit of Sh700 million on a revenue base of more than Sh3 billion.

Allocations:
Public-47%
Insurance Companies-20%
Qualified Institutional Investors-30%
Kenya Re Employees-3%
Delivery Vs Payment:
The IPO offers institutional investors a chance to pay for shares only allocated to them thus reducing on the refund payments as other investors wil be left to grapple with underallcoation and chasing refund payments. Why this preference???

Kenya Re IPO Opens 18th July 2007

Initial Public Offer (IPO):
It is now official that the Kenya Re IPO opens in a week (July 18) and most investors are bracing themselves ready to jump in on the bandwagon and get a piece of this national cake.

Retail Investors:
In most IPos from Kengen, Scangroup, eveready, acessKenya etc it has been evident that retail investors are the majority and more often than not have to contend with minimal share allocations way below their applications. This is then followed by a rigorous process of seeking from refunds which more often than not leaves many a discouraged lot wishing they had not in the first place plunged into this stock markwr mania.

Prospectus:
Most savvy investors are nonetheless waiting for the release of the prospectus for them to analyze the company fundamentals and assess the company credibility as a viable investment option vis other counters trading at the bourse.

Scandals:
The the compnay is still reeling from scandals that rock it, investors are waiting with bated breaths hoping to make a kill during the first few weeks if trends i nthe stock market point upwards. The books however have been 'cleaned' though many would stilldig deep down inorder to ascertain what would have led to the firing of the MD and its close Finance Director who were alegedly involved in the corruption racket. We are waiting...

Monopoly:
Kenya Re being a Reinsurer, that insures other insurance companies is a monopoly of some sort (more like Kengen and might follow the same trend) with alot of assets in its name that would provide a solid security base though the current trend of accidents and especially the Kenya Airways (KQ) Crash might have an impact on the company that has to compensate some employees of the company who lost their lives during the fateful day. The company has good growth prospects that is likely to create excitement at the stock market.

Corporate/institutional investors:
They have been allocated a substantial portion of the offerered shares.

Allocations:
Retail investors; 47% equal to 112.8 million shares of the 240 million shares offered.

Pyramid schemes:
This year witnessed the meteoric rise in the number off pyramid schemes that latter came tumbling down with a big thud going under with millions of shillings in investors money. Those who were lucky to have gotten their money back may rush again to invest at the bourse since this schemes had led to massive sales at the NSE as crious investors hoped to rake in millions from this rather lucrative deals supposedly referred to as the viable investment schemes that offered mind bloggling returns, its sustainability notwithstanding.

Statistics:
= IPO opens on July 18, closes on July 31.
=Result out mid-August and listing towards end of August or early september.
=minimum shares for retail is 2,000 shares @ 9.50 which is worth 19000.

Parting shot:
Is it true that institutional investors complains about refunds has been heeded and they dont have to pay any money for the shares applied until they get their share allocation confirmed?