The path for women's groups to qualify for KPC shares
Beyond registration, women’s groups need a valid CDS account and formal minutes to participate in the Sh9-per-share offer.
What you need to know:
- Groups may also be required to provide a copy of their registration certificate stamped by the relevant registration office, a group constitution, minutes resolving to open the account, a list of members with ID numbers signed and stamped by the registration authority, and an introduction letter from the same authority.
Jane Muthoni is a member of four registered women’s groups and serves as chairperson of all of them.
Her members range from small-scale traders running green groceries and second-hand clothes stalls to larger investors with rental properties. For them, opportunities like the government’s sale of Kenya Pipeline Company (KPC) shares are exciting prospects.
“That could be a good way of investing, but I don’t know whether we can invest as a group, collectively, or as individuals,” she says.
According to the KPC share offer memorandum, eligible Kenyan institutions are formally defined as corporate bodies and Qualified Institutional Investors. This category includes entities like Collective Investment Schemes, Investment Banks, retirement benefit schemes, and life insurance companies, all licensed by relevant authorities.
Each share is priced at Sh9, with a par value of Sh0.02. The Sh0.02 per share is the share capital which stays with KPC for as long as the company exists - it becomes part of the company’s permanent capital.
The offer is open until February 19, and the minimum application is 100 shares.
Of the total shares on offer, 60 per cent have been allocated to Kenyan investors. This includes 20 per cent for individual investors, 20 per cent for institutional investors, five per cent for KPC employees, and 15 per cent for marketing companies in Kenya.
So where does this leave women’s groups such as those led by Muthoni?
We asked the CMA whether women-led groups could participate. Their communications unit explained that the institutions listed in the memorandum raise funds from both men and
women, and that they do not maintain gender-specific data on such investments.
“There are no women-led Collective Investment Schemes in the capital markets,” the CMA stated. “Funds for these products are pooled from across both genders.”
Under the Capital Markets (Collective Investment Schemes) Regulations, 2023, a collective investment scheme pools funds either from the public or through private arrangements.
Where such a scheme is constituted as a company, it must have at least three directors, one of whom must be a licensed fund manager. The directors must be fit and proper persons, with experience and expertise appropriate for the business. A fund manager—acting as the authorised corporate director—must be appointed, and the custodian must be independent of the directors.
Muthoni’s groups do not meet these criteria.
However, a stockbroker at one of the authorised IPO application agents said registered women’s groups can buy the shares collectively provided they meet certain requirements.
Registration alone is not sufficient. The group must also have a valid central depository system (CDS) account, opened through a licensed stockbroker or investment bank.
A review of the stockbroker’s website shows that for self-help groups - under which women’s groups fall - the requirements for opening a CDS account include identification cards or valid passports of each signatory, passport-size photographs, and a duly completed and signed CDS 1 account opening form and addendum.
Groups may also be required to provide a copy of their registration certificate stamped by the relevant registration office, a group constitution, minutes resolving to open the account, a list of members with ID numbers signed and stamped by the registration authority, and an introduction letter from the same authority.
The IPO memorandum further states that whether an investor applies through the USSD code *483*816# or online, a valid CDS account is mandatory.
Rina Hicks, an investment banker and operations director at Faida Investment Bank, who is also the lead transaction adviser for the IPO, confirmed that registered chamas are eligible to invest.
“So, it’s open to everybody as long as you have a registration number. If they are informal chamas, they cannot apply as a group, but their members can still apply as individuals - 100 shares cost Sh900, so members can apply on their own,” she said.
But how can women make money from KPC shares?
“When you buy a share, you are buying part ownership in a company,” Rina Hicks explains. “If the company makes a profit and distributes it through dividends, you benefit because you receive cash payments.”
She adds that investors can also earn through capital gains.
“The second way you earn from owning shares is through what we call capital gains. If the company performs well and the share price rises from Sh9 to, say, Sh9.20 or Sh9.50, you can sell and make a gain. That’s the second way investors benefit.”
