The temporary suspension of Stanbic Bank Uganda from the financial market will not affect the operation of the stock market, industry analysts have said.
According to the African Alliance research analyst, Mr Arthur Nsiko, the voluntary suspension is a normal occurrence, saying this one was done with a view to pay off the listed bond ahead of its maturity.
“There is a premium (money that will be paid on face value) that goes with paying off the bond and therefore no matter how you look at it, it is not a bad thing both for the industry and the players involved,” Mr Nsiko said yesterday when contacted.
Stanbic yesterday issued a statement announcing voluntary suspension of its trading note on the Uganda Securities Exchange so as to pay off its listed bond before it matures.
The statement read: “In line with its obligations under the USE listing rules, 2003, Stanbic Bank Uganda Limited informs the public that it intends to exercise early redemption of its subordinated note that was issued in 2009.”
This, according to Mr Nsiko, is a normal operation where the player involved wants to redeem or clear a listed bond before maturity.
Stanbic will be the third company to do the same after the power distributor, Umeme suspended trading of its shares on May 6, to allow UK-based private equity firm Actis to dispose of a significant portion of its 60.08 per cent stake in Umeme through the stock market, without disrupting the price of the company’s shares at the bourse
Dfcu, also suspended trading in April last year when the then company’s major shareholder, Commonwealth Development Corporation, moved to sell some of its shares to the Norwegian Investment Fund for Developing Countries and Rabo Development B.V.
going by the rules
Under rule 5 (1) (C) of the Uganda Securities Exchange (USE) Llisting Rules, 2003), temporary suspension is allowed.