Sammy, one of the avid readers of this column asked me whether it is a wise decision to invest in the ongoing MTN Uganda initial Public Offer (IPO)
MTN Uganda is a subsidiary of MTN Group Limited, a South African multinational mobile telecommunications company, operating in many African and Asian countries headquartered in Johannesburg.
MTN Uganda opened its IPO of 20 percent of its shares on October 11 and the offer will close on November 22. Kenyans are eligible to participate alongside other citizens of East African countries. Shares are regulated by the Capital Markets Authority of Uganda (CMA) and listed on Uganda Securities Exchange (USE).
Drumming for Kenyans to hasten and take a piece of Multibillion-shilling IPO, Sterling Capital Limited’s regional coordinator and investment manager Benson Kasyoka Kivai noted that MTN Uganda is the leading mobile operator in Uganda controlling 59.1 percent of the telecommunications market.
Sterling Capital has partnered with Equity Brokers, Uganda to facilitate the buying of the MTN Uganda IPO.
MTN Uganda has seen its subscriber base grow at a compounded annual growth rate (CAGR) of 25.7 percent in the past three years, growing from 11.3 million in 2018 to 14.2 million in 2020 and this growth is likely to continue going forward given Uganda’s low mobile penetration rate of only 61.1 percent, which lags other African peers.
The low mobile penetration rate, high population growth rates and a gross domestic product (GDP) growth rate of +/- 5 percent in the medium term offers a very conducive environment for the growth of the mobile telecommunications industry and good returns to investors.
There is also huge opportunity for growth within data and fintech service segments.
Uganda’s internet penetration rate has grown significantly between 2016 and 2020, from 15.8 percent to 26.1 percent.
Generally, stock market is one of the least understood investment areas, it is loathed and loved by different categories of people in equal measure.
Despite efforts by Capital Markets Authority and other stakeholders to educate the general public on the importance of investing in stocks, public participation is still very low. Majority of potential investors see stock market as a risky venture or one with dismal returns, especially if one does not have much money.This is far from the truth. Stock market investment is for everyone and if done well has the highest returns in the long-term. It surpasses even real estate investment which is favourite of many people. However, in the short-term it […]