Kampala, Uganda — The South African telecom subsidiary in Uganda, MTN, began a new journey on Dec.06, with the listing on the Uganda Securities Exchange, and the share price surging past the IPO price during the first week of trading.
The company’s share price increased by an average of 2% to Shs204 during the entire week, signaling strong confidence in the telco on the bourse.
It raised Shs535.9 billion after floating a 20% stake in an IPO that was the biggest in the East African nation’s history, doubling the Kampala market’s capitalization.
MTN Chief Executive Officer, Wim Vanhelleputte, said the offer increased local Ugandan ownership from 4% to 15%. He said, under subscription was a result of ‘negativity’ during the six-week sale period and that the remaining 7% stake will be sold within three years.
The South African-based MTN Group Ltd. cut its 96% stake by 13%, against an initial target of 20%.
"A lot of people thought that MTN was not going to succeed, even during the opening period of the offer, there was a lot of negativities, a lot of misunderstanding around the facts and figures," Vanhelleputte said.
He said, the new development is meant to align with the Uganda Communications Commission’s new licensing requirement for broad-based ownership by Ugandans whose compliance deadline is mid-2022.
UCC Executive Director, Irene Sewankambo, said it will take long and a lot of effort to make the Ugandan public appreciate the financial market because, apart from lack of knowledge, there is too much misinformation via social media.
Anne Juuko, chief executive of Stanbic Bank, whose subsidiary, SBG securities acted as a lead sponsoring broker and the bank as a transaction advisor said, the IPO attracted 21,394 applicants, of which 20,894 were Ugandans.
She said, of the total share applicants, 87% of Ugandan investors were allocated shares. The east African and retail investors were allocated 9% and 10%, respectively.
USE acting chairman, Richard Byarugaba, said the private investors should learn from MTN experience that there is a lot of money for capital through the stock market instead of going for expensive commercial bank loans.Keith Kalyegira, CEO at the Capital Markets Authority said the new listing raises the country’s hopes to attract foreign capital, especially from global fund managers."The listing is quite significant as it draws the Uganda market closer to being categorized as a frontier market by the different providers of different categorization indices and particularly Morgan Stanley Capital International," he said.Data […]
