Uganda’s National Insurance Corporation (www.nic.co.ug), was oversubscribed after Uganda Shilling (UGX) 9.5 billion (US$4.6 million came in applications when Government offered its remaining 40% stake in the company in an 161,552,000 shares totalling UGX 7.2 bln.
Shares are set to trade on the Uganda Securities Exchange (www.use.or.ug) according to a report on Reuters newsagency, quoting Jim Mugunga, communications manager for the Uganda’s Privatisation Unit.
It will be a welcome boost to the USE, which had seen foreign investors leaving in the global crisis and share prices falling. It is reportedly the first listing since 2006.
Retail investors were allotted 90% of the shares, which had been sold at “a subsidised affordable price” of UGX 45 ($0.02) each, according to the insurer’s website. per share. Another 4% of the issued shares has been reserved for the permanent employees of NIC at the IPO price.. In 2005, the Government had sold 60% of the company to Nigeria’s In June 2005 the Government had sold 60% of the shareholding in NIC to Industrial and General Insurance Company Limited (lGI) of Nigeria (www.iginigeria.com),
Reuters quotes an analyst at African Alliance brokerage (www.africanalliance.com), Keneth Kitariko, saying he expects NIC’s share price will rise modestly in the secondary market.
“We do expect some correlation between the level of oversubscription and performance in secondary market, so mostly we’ll see a share price rise but the numbers will be conservative,” he said.
Reuters says discovery of large crude oil deposits turned a spotlight on East Africa’s third-largest economy, where growth is expected to be 5% in fiscal 2009-2010 and then climb to 7% the next year.
According to the NIC website: “The Government of Uganda has to-date privatized 6 of Uganda’s successful public companies by way of IPOs. The companies namely are; – Uganda Clays Limited (UCL), British American Tobacco Uganda Limited (BATU), Bank of Baroda (U) Limited (BOBU), DFCU Limited, New Vision Printing and Publishing Company Limited (NVL), and Stanbic Bank Uganda Limited (SBU).”