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J.P. Morgan Securities plc has been appointed by Singapore Telecom International Pte Ltd to sell approximately 55 million ordinary shares in Airtel Africa plc as part of an accelerated bookbuild process.
The bookbuild process will commence with immediate effect following this announcement and may close at any time at short notice.
Airtel Africa will not receive any proceeds from the Placing.
I have no idea why Singapore Telecom International Pte Ltd is selling these shares but an accelerated bookbuild is often used when a company is in immediate need of financing.
I do not see it as any reflection on AAF as an investment.
It is however a large number of shares to come to market.
It may be connected with its acquisition of dialog PTE for $325m, which was announced earlier this month.
Early investors taking profit-the price will be key. Maybe good opp to buy a few more....
It would appear that the sale by Singtel has now been completed. 60m shares of AAF were sold at an average price of £1.40.
This represents about 1.6% of AAF shares in issue, Singtel retains 3.9% of AAF share capital.
Similar happened on 7/2/22, at exactly the same price, £1.40 and the share tanked the next day before recovering. As you said, there does seem to be a legitimate reason for the sale, so let's hope we;re not hit so hard this time. Frustrating after breaking out of a bullish triangle pattern.
Repression
Thank you for that response. I think we may see a drop in the SP, but the fundementals of the company remain unchanged, so once the shares have cleared I would expect to see a similar recovery.
I really like this stock as a long term hold, but may take a little profit in the short term. I do not intend to reduce my holding long term.
I missed the boat, SP around 10% down, I'm not too disappointed though as its not unexpected, although a bit oversold. I'll just continue to hold and wait for the inevitable climb back up.
I could have made a quick £2.5k, but as proved I'm no good at (day) trading, so will stick to my original investing strategy.
One worry - are there any other such bookbinding agreements in force?
It is annoying that this has happened twice in the space of 6 weeks mind. It does make me a little wary of the share. Hope it's not going to be a regular occurence, looking over our shoulders waiting for the next time for it to happen. On the plus side hopefully it puts a floor on the sahre around £1.40, but I'm not impressed by these shenanigans.
spotopp
No there are no other bookbuilding deals. Due to the size of these types of trade and the obvious impact on the SP, they must be announced in advance.
I still maintain that the seller in this case needed to raise funds for their expansion through acquisition.
The current drop in SP is just white noise, and means little unless one needs to sell to raise funds.
My only real regret is that this close to the end of the tax year I don't have a big enough free float to buy another 10000 or so of these shares.
Repression
Not so much 'shenanigans' just business. Institutions buy and sell stocks. Although I'm no trader I have rarely traded stock myself. I bought about £18k of this stock at 77p, sold at £1.33, used profits and initial investment to buy back in on a dip. Not because I didn't believe that AAF was a good business, but because I saw the potential to increase my holding at no additional cost. I say I rarely trade because I'm simply no good at it, and I do it once maybe every 2 or 3 years. Genrally I do far better waiting for a good price, buying and holding long term.
Its already up 3p on the days low.
As a long term hold IMHO anything below £1.43 is a good entry long term.
For those holding at a higher average, its unpleasant but I am very confident this will go back above £150 in the next 4 to 6 weeks.
Buy/sell with the head, not the heart.
GLA
I bought in because it seemed a stable share, progressing gradually , then all this began to happen., so I sold out on the last peak. I notice Airtel is in India, too. Is India the HQ? Looking at the Director list (above) it would seem so.
Paul thanks for that reassurance. Agree about topping up now
If Airtel keep doing what theyre doing I wont have a heart to sell with at this rate.
AAF does not include Bharti Airtel, the Indian business which could be regarded as the parent. I believe the African HQ is in Nigeria, their largest market, but the management team includes several Indians. The persistent placings at around book value suggest the major shareholders see downside risks at that level
Bharti Airtel is definitely the parent from which AAF was spun. They are distinct companies, but various Bharti family members hold major positions. To some extent, AAF is reliant on Bharti technology too. Not sure major shareholders necessarily see downside, they are just early backers taking a profit. Long term upside from 140p seems highly likely, imo, with vast opportunity across the continent and a seeming ability to outperform rivals.
IgorBelvoir.
Tic up for name.
Not for anything else.
If you look, the placings are regular events. I halved my holding at about 80p when it happened and how stupid was I?
I first bought this around 36p. SO did a lot of others. At a much higher level than me. That's how it works. Read the RNS look at the charts and look forward to Full Year.
Rs
RM
Igor-rubbish downramping: you don't know what you are talking about. This has happened 4 times since I bought in 2020. I'm up 80%. Current geo-politiical malaise notwithstanding, there is only one way for this share. In Africa, telecommunications is basically a part of the financial industry. Innovative ways of using mobiles are being developed across the continent where the market grows inexorably due to demographics. All the focus is on Nigeria, but look at Tanzania, Uganda and Kenya's population data and the latter's fintech credentials.
GLA
To be clear, this does not represent a share dilution due to the issue of new shares, its simply an increase in float due to a large sale. Absolutly nothing has changed regarding the fundementals of this stock.
If you thought it was worth holding before the sale its worth holding now.
For those of a nervous disposition a little research regarding the company who sold the stock and potential reasons, may reassure you. If your research consists of social media and reading bbs, then frankly another type of investment may be more suitable.
A company with any issues doesn't pay off $505m of debt a year early.
(08/03/22 Alliance News)
I am asking myself if in this " great " British transparent free and fair market is this share sp being manipulated ? Surely not, but it seems very strange that 1.6 % of the listed shares can be traded in a virtually instantaneous " book build " resulting in an instantaneous 10% fall in the in the sp and tripped stop losses for any holder foolish enough to place a stop loss.
We know who the " seller " was but we do not know who the recipient was , I wonder why ? Could they be associated companies so the apparent 10% paper loss for the seller would have no impact . The book build was announced after the market close one and by the next day it was accomplished , seems very strange the word " build " would imply a gradual process but here the " seller " and recipient were seemingly pre ordained .
I am super confident that our wonderful Financial Conduct Authority would have stringent rules in place to prevent such manipulation so no worries + it provides a great chance to pick up more shares at a 10% discount . Picked up quite at 70 after a similar fall some time back.
ATB
A lot of misunderstanding on this thread. This has happened several times before. As someone said earlier, it's a normal institutional business activity. The temporary SP drop is normal too, depending on the sale price. This is highly likely to happen again, probably several times, so if anyone finds it unsettling, maybe this isn't the stock for you.
Worth noting that the Bharti family hold the majority of the shares, so 1.6% of the remaining shares represents a relatively bigger proportion of the shares actively traded and therefore probably has an outsize effect. There are no new shares "placed" and no real increase in the free float, it's simply a rapid institutional sale of a large block, probably to other institutions. What these actions amount to is the retail price temporarily moving close to a notional institutional price: nothing to worry about, because they inevitably recover in line with retail activity over a few weeks. Ascribing it to nefarious practises or "manipulation" is a misunderstanding of the nature of these transactions, and how the market works, imo.
Totally agree.
The first thing to do on a new stock is read the historical RNS and the price graph. Gives you a feel for it....
Hi BlahBlahDoh I agree with most of your comments and you certainly have a greater in depth knowledge of this company than I do so thank you for sharing it with us .
On a wider scale and not necessarily with regards to AAF, stock markets must be seen to be free fair and transparent otherwise they simply cannot function . If off the market institutions can get together and formulate a price to sell a relatively small amount of the free float and have an instant impact on the sp those institutions would have a disproportionate power over the market . IMO this would create distrust in a free and fair market and amount to manipulation .
I completely agree that eventually the sp will revert to the fundamentals of the company concerned