Market Turnover Comes Off to 799.0 Million Shillings on Monday

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Turnover came off further during the Monday’s trading to 799.0 million shillings focused on the long end and the Infrastructure bonds.

The market will remain subdued until results from this month’s auction are announced. Economic analysts, Genghis Capital, say that they expect subscriptions on the offered bonds to be heavy as both fund managers and banks will be participating heavily. The CBK stayed out of the market yesterday sighting a square market, while the local unit continued to be resilient at 103.20 despite an upsurge in corporate demand.

Corporate News:
Vodafone International is set to transfer 87.5 percent of Vodafone Kenya to its subsidiary, Vodacom Group (listed on the Johannesburg Stock Exchange).

According to company filings, Vodafone Group Plc (Listed on London Stock Exchange) has opted to change its shareholding structure in Vodafone Kenya which owns 40 percent of Safaricom. Under the current structure, Vodafone Group Plc owns 100 percent of Vodafone International which owns 65 percent of Vodacom Group (SA) and 100 percent of Vodafone Kenya. Vodafone Kenya, in turn, owns 40 percent of Safaricom.

The new deal will see Vodacom Group (SA) issue 226.8Mn shares to Vodafone International in exchange for the 35 percent stake in Safaricom. According to the company filings, this implies a price of about KES 19.10 for Safaricom – which is a discount to Safaricom’s VWAP of 20.25 shillings as at 15th March 2017.

Post-transaction, Vodafone Plc will retain 100 percent ownership in Vodafone International. Vodafone International will then own 70 percent of Vodacom Group (SA) and 12.5 percent of Vodafone Kenya (which translates to a 5 percent shareholding in Safaricom). Vodacom Group will then own 87.5 percent of Vodafone Kenya implying a 35 percent shareholding in Safaricom.

 

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