Investor interest in the mobile-based infrastructure bond M-Akiba rose last weekend as the sale entered the homestretch, but cash raised remained way below the Sh1 billion target.
About Sh236.09 million had been raised by 1:52pm Friday or 23.61 per cent of the target. But registration rose to 302,753 investors ahead of today’s deadline according to the Treasury.
Barring a last-minute surge in interest, the bond appears headed for massive under-subscription amidst electioneering noise.
The door remains open for subscription of up to Sh3.85 billion that currently seems unattainable.
Buys in the seven days through Friday afternoon were Sh47.82 million, or Sh6.83 million daily, compared with Sh20.92 million weekly average or Sh2.99 million daily in the preceding nine weeks to September 1.
Subscription rate to the Sh1 billion offering, which was extended by 52 days after failing to hit the target within the set June 30 to July 21 time frame, has been lower compared to the Sh150 million pilot offering launched on March 23.
The pilot issue was snapped up two days to the April 5 deadline, with daily buys averaging Sh12.5 million and registrations at 8,552 investors a day.
“Initially, there was some bit of curiosity which is why everybody invested, but now you need to sustainably market it so that it becomes a proper investment channel for investors so that the same way you choose a bank, unit trust or land, you should also be thinking of M-Akiba,” Britam Asset Managers chief executive Kenneth Kaniu said in an earlier interview.
Indeed, investment analysts have largely blamed the poor show lately on inadequate marketing campaigns compared to the pilot one.
“M-Akiba is a revolutionary and inclusive financial programme. (But) the marketing and investor education has been lackadaisical and lackluster,” Aly-Khan Satchu, who runs Rich Management said last week.
NSE Plc chief executive Geoffrey Odundo has, however, maintained the focus should shift to the potential of the M-Akiba system with rising hundreds of thousands of registered investors “spread across the country” rather than the cash the Treasury has raised.
“We should not focus so much on what’s generating value but can you do in future. I mean if today the government can generate money this way, what will prevent a corporate from doing an IPO (Initial Public Offering) or corporate bond through this same platform?” Mr Odundo said on August 22.