SAFARICOM IS A KILL

Yes, for those who have been sending mail and calling our research desk asking whether Safaricom was a good buy. We unequivocably state that it was. The reason is simple all IPOs are undervalued to encourage price discovery once trading starts at the NSE. What is debateble are two items one was it worth to invest a life times savings ? again yes as long as you do not have any other immediate needs for the funds. Going by reports that the level of oversubscription could be 200% then it is going to take a while for the refunds to be back to investors.

but do not hold on the shares, except for MPESA, Safaricom has not made significant in roads in the foreign market as have EABL. After saturating the local market which is certain in the near future where will Safaricoms growth come from? Again the onslaught of ICT through chat facilities such as Yahoo messanger and Google chat are a big threat to Safaricom. You may want to argue that how many Kenyans have internet but do not forget Kenyas 80% of the economy is in Nairobi and thats where the challenge comes in. Hold it and reap but as usual we will warn our investors on just when to exit.

Thanks for the concern and we are welcome to querries at our research desk cbsrkenya@gmail.com or makokhawanjala@gmail.com