Friday, 7 June 2013

Small Investors lose out on Safaricom Shares.

This weekend marks five years since Safaricom floated its shares at the Nairobi Securities exchange. A total of 10 billion shares were floated. It’s been mixed fortunes so far. For the government and institutional investors, the fortunes from the floating have been mind boggling, but for the small retail investors, the fortunes have dimmed, and that perhaps explains why small investors have largely shied
away from the NSE. 

A shadowy firm, mobitelea, which held a 5 percent stake in Safaricom, has since sold the stake to Vodafone Plc, even as those behind the shadowy company have not been identified to date. Perhaps, the greatest lesson from the issue of Safaricom shares is that just because a leading company floats its shares doesn’t mean fortunes are to be made, there are transaction fees to be paid. Even worse are the small investors who took loans to buy shares, as they had to pay hidden loan charges form banks, and the banks held their shares as security until all the loans as cleared up.

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