Dfcu Bank share price remains high despite additional listing

Mr Elly Karuhanga, the dfcu bank board chairman. He said since the bank listed in 2004, shares have doubled and shareholders increased.

What you need to know:

Growth. Since listing in 2004, the bank’s shares have doubled from 250 to 500.

Kampala. High demand for dfcu shares has seen the company’s share price remain high despite the listing of 250 million new ordinary shares on Uganda Securities Exchange (USE).
The market had anticipated the price to fall by a half of the previous price of Shs1,250 per share because of the extra 250 million shares.
A half of 1,250 per share after listing new shares would have been Shs625 but this didn’t happen as the demand for the company shares remained high.
Addressing market analysts, journalists and brokers during the listing on Monday, the chief executive officer African Alliance Uganda Limited, Mr Kenneth Kitariko, said: “Dfcu shares are trading at Shs650 each which is above the premium price. This amount is above the half-way point of Shs1,250 price it was trading before the listing of new shares on USE today.”
Mr Katariko said the reason why the dfcu share price never dropped is because investors consider dfcu a good stock.
He explained that the listing of 250 million new shares on USE has increased dfcu market capitalisation from Shs302 billion to Shs320 billion placing dfcu among the four largest locally listed companies.
On the first day of trading after the listing of new ordinary shares, dfcu traded 200,000 shares which generated a turnover of Shs130,004,300.
The bank’s board chairman, Mr Elly Karuhanga, said dfcu was listed on the USE in 2004, and at the time there were 2,000 shareholders that have since increased to 3,800 shareholders.
“The number of dfcu shares available on the USE has doubled from 250 million shares at the time of listing in 2004 to the current number of 500 million shares,” he said.
On the future plans and outlook, the bank’s chief of business, Mr Paul Van Apeldoorn, said the bank is focusing on growing its business base through retail banking and expanding its current branch network from 45 to 50 branches in the near future.
“Besides expansion, our area of growth/operations is going to be in oil, gas, minerals and agriculture where we are seeing a lot of opportunities alongside SMEs and institutional banking,” he said.

Market growth
Dfcu Bank becomes the second company to issue bonus shares to its shareholders this year after National Incurance Corporation (NIC).
Mr Edgar Mutebi, a broker with UAP, told Daily Monitor that additional listing by NIC and dfcu will add more liquidity and volume of transaction at the Uganda Securities Exchange (USE). “We expect market growth in the capital markets industry out of these corporate actions,” he said.
Dfcu is among eight locally-listed companies and its counter is one of the active ones on the USE.