Tuesday, January 02, 2007

IPO Fever Grips USE (but not local Ugandans?)

The Stanbic Bank (Uganda) listing appears to have been 3x oversubscribed. So, many investors will likely receive fewer shares than they applied for, but the final allocation will not be released for at least two more weeks.

The billion-share listing represents a 20% stake in the bank, a subsidiary of South Africa's Standard Bank Group.

According to local brokers, most of the demand for shares came from overseas Ugandans, Kenyans and investors as far afield as the US and UK.

The Uganda Securities Exchange is one of Africa’s more sleepy ones. I’m hoping this IPO stimulates more interest in the market among local Ugandans.

www.investinginafrica.net

6 comments:

Anonymous said...

I am very optimistic that the IPO will cultivate interest among Ugandans. The much awaited East African Stock Exchange will bring more East Africans, including Great Lakes residents, into the region's capital markets. (See my post on that issue)

The Kabaka said...

I think the USE should do away with some of their funny rules.

1. brokers should be alloweed to make the market in order for the market to absorb moments of temporary illiquidity.
2. the "one day offer board thing" for deals over 200mn is utter rubbish and a hindrance to liquidity and effiency principls
3. they should remove limits of share price movements. If a share price has moved to extremes, they should suspend the counter.
4.they should support their members. I am suprised they are for this "East African Exchange" yet they know very well their members will not be able to compete with the members of the NSE - be it customer-base-wise or capital-wise. It reminds me of the duty thing when Uganda upped its duty to allign with Kenya's and lost its competitive advantage.

But I hope Stanbic will open a few eyes. The problem is, since Stanbic has not really been engaging its brokers in this IPO, how are all people who bought shares through Stanbic branches and are ignorant of brokerage firms and trading going to trade? Or they just wait for the dividends?

coldtusker said...

I wonder how much Kenyans contributed to the oversubscription!

Many Kenyan brokers had forged "relationships" with their Ugandan counterparts. Furthermore, AA(K) & D&B have offices Uganda thus easing the process for their customers.

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Anonymous said...

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QUALITY STOCKS UNDER 5 DOLLARS said...

Interesting story on IPO'S