NSE wants Coop offer pushed

September 25, 2008
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, NAIROBI, September 25 – The Co-operative bank initial public offering (IPO) slated for next month could be postponed to February or March next year, if a proposal by the Nairobi Stock Exchange (NSE) is adopted.

NSE Chairman James Wangunyu said on Thursday that the current operating environment at the bourse may not be very conducive for the floating of this share.

The market has been bearish over the last year as a result of both local and global factors, like the after effects of the post election violence and the current global economic recession. 

“We believe, very strongly, that this is a bad time for the Co-operative bank to come in, to take from the economy Sh10 billion again, with the prices that are there. This is not the opportune time,” Wangunyu said.

Speaking during celebrations to mark two years of operation of the Automated Teller System, Wangunyu said the final decision on the IPO can only be made between the issuer – Co-op Bank – and Capital Markets Authority.

“It’s our feeling as the Nairobi Stock Exchange. But if the issuer insists that he wants it in October-November and the capital authority do allow then will go by that,” he said.

Meanwhile Wangunyu is proposing the introduction of a lock-up system in the market as a way of protecting it from speculation by foreign investors which could be blamed for the low Safaricom prices in the market.

“I would put a lock-up for the foreign investor, that is happening in India and elsewhere in other markets, you bring them in and lock them for a year or whatever time you find appropriate” he suggested.

Massive disposal of the Safaricom share after the initial public offering has previously been blamed for contributing to the slump being experienced in the market.

The company is the biggest in the bourse by market capitalisation. 

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