People,forgive my naivete in these matters and please offer your insights. Here is the thing,if Safaricom intends to raise 20 billion for network expansion through a bond:
1) If at the bourse,with investors reeling from poor performance,and bearing in mind today's govt infrastructure bond,plus the fact that banks are still grappling with debts owed by people who took loans to speculate on Safaricom,etc,etc - will this really work or was it a gimmick to help stimulate share prices and persuade shareholder to hold on to shares (thus avoid the SELL glut that has kept the price down)
2) Safaricom has taken the fight to commercial banks through Mpesa - can these same banks still help fund its expansion through loans or investing in bonds? Why not help SCOM to its death and keep off the bonds/loans
3) Average revenue per user (ARPU) keeps sliding like a greased penguin on melting ice - if they posted 14 billion last year,lets assume that even after the onslaught by Zain and the flurry of activity in the data market (Zuku,Orange,etc) they manage to post another 14 billion. So there are shareholders to be pleased - I saw a discussion about the impossibility of even paying out 50 cts per share - with 14 billion they could manage 25 cts dividends and still have some change,but not enough to fund expansion and pay debts. They are also due to pay their way into TEAMS,for a 20% share . Without bandwidth from TEAMS,they might as well start selling rotary dial phones. So,back to the bond,can it work really? So,lets say investors are not too keen on shares on the market,not even bonds - what can help Safaricom?

The problem with equality is that we desire that it be with those that have more than us rather that those that have less

Thanks VituVingiSana - now,not meaning to be argumentative,assume the unit trust guys want to go for these (and have money tied up in shares and already in other bonds),will they not shed more (SCOM) shares to get liquid and buy into the bond? Thus sustaining low prices.

Also,we know not what profits SCOM has posted - at this juncture the bond is still a plan - and perhaps some clever presentation of results may enamour bond investors and banks to invest. However,I'm trying also to read some signals in the market,including the delay of allowing Zain to do its Zap - a delay I think will last until AFTER SCOM posts its results - assume the results are lacklustre,for those in for the long haul,Zain and its Zap and increasing market share,says a lot about what SCOM's profitability will be in 2010. They will definitely lose market share in voice,data and m-banking. Zain comes in well bank rolled and can do things in leaps and bounds.

My other concern is this - what is CMA's role in protecting the shareholders if unit managers,foreign investors,etc opt for the bond (and perhaps shed more SCOM shares,thus driving the price further down) since they are more secure,while the Kenyan's who bought the shares at Kshs 5 now have shares floating around Kshs 3 and with no dividend in sight. So the deep pockets win again? Is that fair?

Your take? Anyone?

The problem with equality is that we desire that it be with those that have more than us rather that those that have less

am wondering with over subcription of T.bills and if infrastructure and bond issue are successfully subscribed,then it will be a good indication that investors have seriously lost there confidence in shares-bearing in mind coop ipo was not successful.



A penny SAVED is a penny wasted if not INVESTED.

Djinn

40,000,000,000 shares x (0.25-0.1) 0.15 dps=6,000,000,000

so you made a meagre Kshs 6Billion typo on the dividend? hahahahaha


I mean fundamental analysis,you get me?

Fundamental analysis of a business involves analyzing its financial statements and health,its management and competitive advantages,and its competitors

Fixed bond yield at 12.25 pct

Safaricom bond to open on 7th October

The thicker the thigh the sweeter the pie.

btw,Kengen bond ilienda aje?