Tanzanians eye the MTN Uganda’s Sh2.7trillion IPO

Tanzanians eye the MTN Uganda’s Sh2.7trillion IPO

Dar es Salaam. Tanzanian investors are keeping their fingers crossed so that all factors would remain constant to allow them participate in an Initial Public Offering (IPO) of MTN Uganda.

MTN Uganda will sell a fifth of its stake to East African investors when it floats its IPO at the Uganda Securities Exchange (USE) soon.

MTN Uganda said that its prospectus will be disclosed on October 11. However, the chief executive officer of Uganda’s Capital Markets Authority (CMA), Mr Keith Kalyegira, said the IPO was expected to raise about $1.2 billion (about Sh2.7 trillion).

“The intention to float the announcement is a major step towards delivering on our plan to list on the USE,” MTN Uganda chairman Charles Mbire told reporters.

This could be one of the few IPOs that Tanzanian investors are allowed to take part in after the country’s capital account liberalization.

Currently, Tanzania allows unrestricted foreign capital inflows except for non-residents of the East African countries who want to buy government securities” Treasuty bonds and bills.

The locals are also allowed to invest outside the country but those going beyond the East African Community (EAC) are required to get approvals from the central bank governor.

“Tanzanians can fully participate in IPOs of companies around the EAC without any restriction as it’s allowed under the East African Common Market Protocols,” said the Bank of Tanzania (BoT) director of economic research and policy, Dr Suleiman Misango.

He said the central bank was also engaging stakeholders in the ongoing process to review the foreign exchange regulations which restrict capital outflow beyond the EAC.

The public relations manager for the Capital Markets and Securities Authority (CMSA), Mr Charles Shirima, shared similar sentiments, noting that unless stated otherwise, there was no longer any restriction for Tanzanian investors to participate in IPOs.

He noted however that so far, there had been no official communication from MTN Uganda which would inform Tanzanian investors on the participation conditions.“But, as far as I know, IPOs from across the EAC are open to all Tanzanian investors,” he said.Besides Tanzania and Uganda, the other members of the EAC are Kenya, Rwanda, Burundi and South Sudan.The IPO is expected to boost the number of retail investors at the USE from about 40,000 to 200,000.The listing will make MTN Uganda the third publicly traded telecom in EAC after Kenya’s Safaricom and Tanzania’s Vodacom. The former was listed at the Nairobi Securities Exchange in 2008 while Vodacom Tanzania was listed […]

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