At different periods the tide of opportunity sets in different directions, according to the needs of the whole and the particular stage of social evolution which has been reached. There is abundance of opportunity for the person who will go with the tide, instead of trying to swim against it. And this was exemplified during the just concluded Safaricom IPO. It was the talk of town and various financial institutions and advisors had their moment in trying to elucidate how a success it was going to be for the ordinary “mwananchi” and it was given the highest billing. Ordinary people without any financial advice, took loans, borrowed heavily to be able to take part in the “quick cash train” that was about to do another round trip with instant wealth, like the time for the Kengen IPO, however, at the moment the reverse is true to the fact that most analysts have been proven wrong on how Safaricom has performed. The ordinary Kenyan is cursing the day they listened to a friend instead of getting prudent financial advice on how to make some money from the IPO or normal trading on the secondary market.

The law of wealth is the same for all. However, the Safaricom IPO brought to the forefront the fact that the equity business, inasmuch as the ordinary Kenyan is being wooed to participate with all manner of marketing by investment institutions, banks and brokers, it’s dominated by a few elite business people and institutions. It’s clear from the fact that its only banks, those that went over board giving out loans to unsuspecting Kenyans without any financial advice on both the merits and demerits of buying stocks through loan processes and a certain clique of investors who clearly were the true beneficiaries of the game. Banking institutions, whose main core business is commercial banking services, muscled in on a business that is not their preserve, due to the fact that they had cash flow strength than brokers, went a head and took part in a business, which they have greatly contributed in muddying and making the “kawaida” investor lose interest and confidence and instead of them feeling the heat, the heat is felt by the brokers and financial advisors. The handling of the Safaricom IPO has left a lot to be desired and has contributed greatly to the loss of investor confidence in our capital markets.

This makes me wonder, what’s the core business for banks like National Bank or Equity? Is it not commercial banking services? And is it not the preserve of the investment banks, like Dyer and Blair and Faida Investment which have the expertise of IPO advice, client advisory services in the aspect of the equity market and other investments and yet, the commercial banks made a killing from the IPO and the principal players were left with the meat remnants. Has the business of share trading been monopolized by those with huge capital reserves? Has the business become the preserve of the rich and wealthy only? While the ordinary Kenyans loose money on the market on a daily for lack of prudent financial advice? Why is it that the ordinary Kenyans, who took loans to participate in the IPO, are the ones who is suffering? If its not delayed refunds, it’s the poor performance of the share at the market, and a lot of confusion on various aspects of the share trading. Is this monopoly noticeable or it’s my mind going bananas? The Safaricom aftermath has left a sour test in many peoples mouths, with many people re-directing their capital away from the equity markets, which in part explains the slow performance of the market, since the IPO listed.

BIKO WAFULA.

CEO… Hidalgo Capital.

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