Airtel Uganda Managing Director, Manoj Murali Kampala, Uganda | THE INDEPENDENT | Uganda’s stock market saw a big leap in growth in 2021, thanks to the listing of MTN Uganda, after more than three years of near-stagnation with limited shares activity.
Over the year, the total value of the stocks of the locally listed companies, or the total market capitalization of the Ugandan stocks on the USE, grew to sh8.7 trillion from 4.27 trillion, boosted by the listing of MTN shares on the USE By June 2021.
Just before MTN went public, USE market capitalization had risen to 4.33 trillion as some shares on the stock market gained value, led by Stanbic Uganda Holdings Ltd and Bank of Baroda whose prices rose by 10per cent and 9 per cent respectively.
“In addition to the demand outstripping supply in the two stocks, there was also the stellar performance of Stanbic Uganda Holdings Limited and Bank of Baroda in 2020 despite the COVID-19 pandemic disruptions,” says Capital Markets Authority Chief Executive Keith Kalyegira about the period ended June 2021.
Following the MTN Initial Public Offer that raised sh536 billion, a total of 1.433 trillion Shillings has now been raised from the stock market in the last 10-years both through initial offers and secondary offerings. MTN’s IPO and a listing came almost four years after the previous offer, by Cipla Quality Chemicals Uganda Ltd in 2018, and was only the second since UMEME’s listing in 2012.
Kalyegira says that 500 billion Shillings in one IPO is proof that there is a lot of idle money in the public which investors could take advantage of instead of going for expensive commercial loans or personal savings. The CMA recognizes that the capital market has remained very small and the growth very slow due to a number of reasons, but mainly lack of knowledge.
“The limited supply of securities or few issuers can be attributed to several factors, such as a nascent private sector dominated by family-owned businesses, low level of awareness of market-based financing and a lack of investment readiness on the part of companies,” says the 2020/2021 Capital Markets Industry Report. Done deal. MTN joined the Uganda Stock Exchange this year Going forward, the CMA says it has put in place several initiatives to ensure more companies embrace the market. These include the Issuer Resource Person Program which uses external contractors to reach out to key persons of prospective […]
