New hope for Co-op Bank shares sale

Co-operative Bank head of IPO processing centre in Nairobi Mr Peter Gocho guides staff. Transactional advisors to the offer are hopeful of a renewed investor appetite. Photo/ CORRESPONDENT

With one week left, the Co-op Bank Initial Public Offering is riding on a positive market trend for uptake.

Transactional advisors to the offer are hopeful of a renewed investor appetite as the stock market picks itself up from the previous poor performance.

The IPO, selling at Sh9.50 a piece, closes next week on Thursday.

Opening at a time when the Nairobi Stock Exchange was facing a downturn, analysts said that investor appetite would be low for the offer compared to previous ones.

According to Mr Bob Karina, the deputy chairman NSE, recent developments are likely to increase investor participation.

“The share opened at a time when the market was quite discouraging. However in the last few days we have seen an improvement. This, we believe, will increase the uptake,” Mr Karina told the Daily Nation on phone.

At the close of trading on Wednesday, the 20-share index had risen by 270 points to 4023.7 compared to 3175.5 points when the IPO was launched.

The market has since been on a positive trend that is hoped to continue for the remaining part of the year.

The bearish run of the market has been attributed to the net outflow by foreign investors. Their participation in the market has since gone up to 55 per cent from only 20 per cent in June.

The upward turn of the market is now being said to be creating the appetite for the retail investors.

“Since Monday we have seen a very strong demand, and this will possibly increase as the market continues to gain,” said Mr Hassan Mohamed, joint managing director, Dyer and Blair Investment Bank.

The bank is seeking to offload 701.3 million shares to the public through the offer. An estimated Sh6.6 billion to fund its expansion and operation strategies is expected from the sale.