Ugandan Exchange Sees More IPOs as Cipla Breaks Six-Year Drought

KAMPALA (Capital Markets in Africa) – Uganda’s stock exchange is in talks with three companies about listing, after Indian drugmaker Cipla Ltd.’s domestic unit ended a six-year drought with its bourse debut.

One of the companies may launch an initial public offering in the next six months, Uganda Securities Exchange Chief Executive Officer Paul Bwiso said in an interview Monday in the capital, Kampala. The bourse has been buoyed by a new government initiative to support the growth of the country’s capital markets, he said.

“We are talking to big people but you cannot be sure until a commitment is done,” Bwiso said, declining to identify the companies. “In the next six months, if the discussions go through we may have a new listing.”

Cipla Quality Chemical Industries Ltd.’s shares surged 13 percent when they began trading on Monday. It brings to nine the number of local listed companies on the USE, while there are eight cross-listings from neighboring Kenya, giving it a total market capitalization of about 25.4 trillion shillings ($6.66 billion). A second bourse that began operations in Uganda in July 2016 has yet to attract an IPO.

MTN Says It’s Mulling Uganda Listing Amid Government Prodding
MTN Group Ltd. may list its Ugandan unit following government pressure on Africa’s biggest wireless carrier by subscribers to increase local ownership in the East African country.

Selling shares on the Uganda Securities Exchange would follow a listing in Ghana and one planned for Nigeria later this year — both agreed to by the Johannesburg-based company as part of deals with regulators. The Uganda Communications Commission said last month that, while listing wasn’t a precondition for renewing a license that expires in October, the government would prefer more Ugandans to be “part of the company,” according to Executive Director Godfrey Mutabazi.

MTN Uganda Ltd. is studying options for “localizing” ownership and enabling as many citizens as possible to acquire shares, Chairman Charles Mbire said Monday in an interview in the capital, Kampala. Details on the stake and the listing timetable will be determined once a study on available options is complete, he said.

Talks on the license renewal are “progressing well” and shareholders are hopeful because MTN has fulfilled roll-out obligations and is Uganda’s highest taxpayer, Mbire said. The company, which has a market share of about 55 percent, is seeking to renew its license for 10 years, according to the regulator.

MTN’s planned Nigerian IPO has been thrown into doubt in recent weeks after the company was hit with more than $10 billion claims by local authorities. The carrier has taken legal action to contest the allegations, which have wiped more than 30 percent off the share price.

Source: Bloomberg Business News