Assessing the opportunity and the risk Kampala, Uganda | ISAAC KHISA | Commenting on the move by Uganda’s largest telecom company, MTN, to list on the country’s stock exchange, Stephen Kaboyo, the managing director at Alpha Capital Partners, sees opportunity.
“In my own prediction, MTN stock will be a good buy, will definitely be oversubscribed, and depending on the share allocation approach, I expect huge presence of retail, pension funds and other institutional investors, as well regional investors,” he said immediately MTN revealed the Initial Public Offer plan.
Kaboyo who heads a local firm focusing on sovereign asset management, foreign exchange trading and financial markets, is a veteran of Uganda’s capital markets. He said he expects MTN’s listing to deepen the capital market and by implication increase its visibility and attractiveness.
“It will help in building investor confidence in Uganda’s equity market and by extension boost the market capitalisation of the stock exchange,” he said.
There has certainly been no bearishness about MTN’s listing, but the bullishness from Kaboyo and others, has also been tempered by providence from professionals.
Keith Kalyegira, the chief executive officer at the Capital Markets Authority cautions investors; whether institutional or individual, to endeavor to understand the salient features of the offer as spelt out in the IPO prospectus, by seeking professional advice from any of the licenses professional investment advisors or participating brokers before investing.
He said by listing, MTN will reap multiple benefits including public relations value that comes with a being quoted company and urged other Ugandan enterprises and family owned businesses with ambitious growth plans to consider market based financing to finance their growth or refinance the expensive debt they may have.
Multiple other sources have also said in as much as investors need to invest their money in the company, they need to do so with caution.
“There’s certainly value in MTN Uganda but don’t put all your savings in there. Don’t look at it like a breakthrough of what you have been waiting for, no,” one of the sources said.
MTN Uganda opened the Initial Public Offer of its ordinary shares on Oct.11 ahead of listing on the stock market.
With each share priced at Shs 200, MTN Uganda aims to raise approximately Shs 895.56 billion (US$250milllion) from the sale of 4.47 billion shares or 20% of its ordinary shares.MTN Uganda CEO Wim Vanhelleputte says the telco plans to invest more than US$300million mainly towards expansion in the network […]