Umeme share stays flat

Firmed. The share seems to have firmed at Shs275 - the same price it sold at the Initial Public Offering.

Kampala.

Experts have said that Umeme’s current share value is a good price and is likely to get better and more profitable in the near future.The comments come at a time when the share has traded at the Uganda Security Exchange (USE) for more than a month now.

At the close of trading yesterday, the power vendor’s share price stayed unchanged, trading at Shs275 - the same price the share sold at the initial public offering.

Mr Edgar Mutebi, the UAP Financial Services securities broker told Daily Monitor that the current price was a result of the poor economic times and the existence of bonus shares on the market.
“What I have noticed is that many of the shareholders are offloading bonus shares. At Shs275, they are making money and comfortable with the price. You don’t expect the share price to move up until all these bonus shares are cleared off the market,” Mr Mutebi said.

“Secondly, demand has not been big. As a result, the price will remain unchanged in the short run but the price might change considering the factors at play,” he added.

Positive price
Mr Arthur Nsiko, a research analyst at African Alliance echoed similar views insisting that “the price is positive. The bonus shares effect is still on the market and affecting the final price.’
During its earlier days after its debut at the secondary market, the Umeme share price hovered between Shs300 and Shs275 before firming at Shs275, a price that the share has maintained till now.
Mr Patrick Mutimba, the Makerere University director for investments said the present price is a reflection on the current market dynamics.
“We can all have opinions about the price but the real effect comes when two people (buyer and seller) agree on a particular price.”

At the close of last year, Umeme cross listed its shares at the Nairobi Stock Exchange, however, the counter has registered zero trading for about three weeks now.
This results from the absence of market infrastructure to support transactions of cross listed companies within the East African region.

nkalungi@ug.nationmedia.com