Do we have an estimate on the uptake so far? Wazua majority vote looks undecided to negative on this so far..though Kenyans are known to be last minute fellows.

they are only raising 600M shillings. that's the aMount traded in a single day in NSE.

This is a type of IPO that does not need everyone to be positive to record a full subscription. To begin with everyone at the bourse already has at least 20% of the information on the intrinsic value and the basic information long before the prospectus was released. I am in because the other 24 shareholders would not wish to see their worth (book value)going down

Speculation depends on your risk appetite , Take the risk and learn from it,
Facts: +209%PAT 2012/2013 PE 7.7 ,futures & derivative exchange in the pipeline
66m is a low supply,am not sure of the demand

Caution: incase of an over subscription we are not certain on the refund date,ie may be past Oct

c/p (Kestrel Capital)

We initiate coverage on the NAIROBI SECURITIES EXCHANGE (NSE) with a BUY recommendation and a target price of KES 14.30, 50.3% above the IPO price of KES 9.50. The Nairobi Securities Exchange’s total income has recorded 5 year CAGR of 35.5% driven by increased market turnover. In last 5 years, the company has moved from a loss after tax of KES 31.8m to a profit after tax of KES 262.2m. For FY14, we forecast earnings per share to grow 5.9% y/y to KES 1.43. The growth in earnings in 2014 is likely to be subdued due to the fact that the company reported a one-off gain of KES 120.0m in 2013 from a recovery of a bad debt. In the longer term, we believe that investments in IT infrastructure and systems will facilitate the creation of new products and the launch of the derivatives market will drive income growth in a cost effective manner. The Nairobi Securities Exchange will be the second exchange in Africa (after the Johannesburg Stock Exchange) to be listed and therefore provides unique exposure to the growth in African Frontier Markets. At the issue price of KES 9.50, the NSE has a forward P/E of 6.7x, P/B of 1.2x and dividend yield of 4.5% compared to the JSE’s P/E of 15.3, P/B of 3.8x and dividend yield of 3.5%.

Investment Positives:
• The NSE as the only licensed and operating securities exchange in Kenya has significant first mover advantage
• With average daily turnover of USD 10.5m, the NSE trades approximately 20 times more value than the rest of the East Africa exchanges together, including Kampala (Uganda), Dar es Salaam (Tanzania) and Kigali (Rwanda), giving the NSE a competitive advantage in terms of regional listings, especially by larger East African companies and Africa private equity fund exits.
• The privatisation of several government companies (Development Bank of Kenya, Consolidated Bank of Kenya, Public Sector Owned/Controlled Sugar companies, Kenya Pipeline Company (KPC), Kenya Meat Commission, New Kenya Co-operative Creameries) will result in an increase in listings and therefore, listing fees and more secondary market trading
• New private sector listings supported by the Growth Enterprise Market Segment (GEMS) will also drive up listing fees and daily turnover
• The development of new market products (such as Real Estate Investment Trusts, Exchange Traded Funds, Asset Backed Securities) will drive demand for securities
• The harmonization of central depositories across the East Africa exchanges will result in more cross listings and therefore growth in turnover
• The implementation of mandatory additional NSSF contributions will drive up over all pension contributions in Kenya
• The entry of new foreign investors, driven primarily by Kenya’s growing contribution to the glob-al Frontier Markets Index and the launch of dedicated Africa funds, as evidenced by the number of new foreign trading accounts, will result in increased trading
• A further expected reduction in settlement time will drive up liquidity and thus turnover
• After demutualization, more organisations will be able to become members of the Nairobi Secu-rities Exchange resulting in increased trading activity
• The introduction of margin trading, securities lending and securities shorting will also drive up trading activity
• Changes in industry capital requirements (in the banking and insurance sectors) will result in more capital raising initiatives and therefore, larger trading volumes
• The investment in IT infrastructure and systems with an upgrade to international FIX compliant standards will allow more transaction capacity at a lower marginal cost
• The establishment of the derivatives exchange will significantly boost average traded value
• Increased direct and indirect participation by retail investors will help support growth in turnover
• The growth in frontier markets will continue improving trading activity going forward
• The strategic ownership of the CDSC will result in concerted effort in growing turnover
• The recent highly successful debut of Kenya’s first international sovereign bond issue has raised the profile of Kenya as an investment destination
• The NSE is aiming to consolidate its hold on bond trading with the recent acquisition of a new bond trading system awaiting regulatory approval.

Investment Risks:
• The more liquid counters account for majority of the trading activity, leading to concentration risk
• The possible re-introduction of capital gains tax could dampen trading volumes
• The high transaction fees in the form of high statutory fees in Kenya (34bps) could be dampening the growth of the market which, on the other hand, could lead to lower short term revenue if reduced significantly to encourage more trading

Just seen it on NTV, seems they read wazua

i have read the IPO prospectus and i want to know, 1. the proceeds of the sale goes to?? this is because there is a table that shows who holds the 100% shareholding but none that shows the shareholding post ipo.
2.the brokers dont have a lock in period. wont they damp their holdings immediately??
3. one requirement is to have people have bank accounts. how are they going to enforce this rule post IPO?

@Aguy Karibu. Have sent you the comprehensive report. Apparently the valuation ratios are based on post ipo number of shares (194,625,000). Recheck. The report is quite bullish on NSE performance and prospects. If achieved, the counter should indeed fly. Am getting me some. initially speculatively.

9 September 2014

Section 4.3 of prospectus; Net proceeds will be used to: (a) invest in new infrastructure to support the various expansion initiatives; (b)
reduce mortgage debt; (c) providing seed capital towards the settlement guarantee fund for futures.

They cant give shareholding structure after IPO because its not yet concluded, so they don't know how it will be but it will result in 33.91% immediate dilution to existing shareholders

The bank account is for refunds