They promised to sell shares, what happened?

Tuesday February 17 2015

Dealers conduct business at the stock exchange

Dealers conduct business at the stock exchange recently. FILE Photo 

By Martin Luther Oketch

With a mundane catch of only 16 companies, the stock exchange and keen observers of equity markets would drool with anxiety at any announcement suggesting a new listing on the market.
Founded in 1997, the Uganda Securities Exchange has in 18 years listed only seven local companies and cross-listed nine all from Kenya.
The growth, analysts say, has been sluggish considering that a number of firms have since established in Uganda with some suggesting they would go public.
But then, why have some companies, which at some point committed publicly, not listed, years after announcing?
Below, we revisit and review the announcements.

Crane Bank
“We are reviewing all possibilities of selling shares within the shortest time possible,” Mr A. R. Kalan, the then Crane Bank managing director, announced at a press briefing organised by Mr Aldrine Nsubuga, the then publicist.
The year was 2009 and more than six years now, subsequent announcements have been made but with no visible possibility of listing for one of Uganda’s largest financial institution.
Mr Kalan and Mr Nsubuga have since left but indications suggest the bank could have shelved the idea as it pursues other priorities.
For instance, at the close of last year, while launching a new branch in Ndeeba, Kampala, Mr Joseph Biribonwa, the bank’s chairman told Daily Monitor, the listing would have to wait, adding: “We are at the moment focusing at completing our expansion plan.”

Housing Finance Bank
In November 2011 Mr Nicholas Okwir, the then Housing Finance Bank managing director, announced they were considering a number of options including selling shares as they sought to raise funds to expand the bank’s operations.
However, Housing Finance Bank, which is partly owned by government, National Social Security Fund and National Housing and Construction Company has since, according to Mr Mathias Katamba, the current managing director, shelved the idea as they focus on expansion and consolidating their core competences, especially in mortgage financing and banking.
Mr Katamba in a short telephone interview last week could not give a timeline on when the bank could reconsider the idea.

Tullow Oil Uganda
Similarly, in 2012, Tullow Oil Uganda announced a possible cross-list on the USE. However, analysts said then the London listed firm’s capitalisation would destabilise the exchange
The matter has since received less attention and efforts to get a comment from Mr Jimmy Mugerwa, the company’s general manager and Mr Conrad Nkutu, the firm’s corporate affairs manager, were futile as repeated calls to known telephone numbers went unanswered.

Kinyara Sugar Works
In 2011, government sold more shares to Rai Holdings, driving the company’s hold on one of Uganda’s largest sugar manufacturer to 70 per cent. The sale was reached after government shelved a decision to sell its entire 49 per cent shares to Ugandans due to a global economic crisis. The two parties also agreed that Rai Holdings would after five years sell shares to Ugandans through an initial public offering.

National Insurance Corporation
Early last year, National Insurance Corporation announced it would cross-list on the Nairobi Stock Exchange. However, the process is yet to be approved, according to officials.
Mr Bayo Folayan, the NIC managing director told this newspaper last week the process was ongoing and consultations were underway.
“We are hopeful that we shall be listing soon,” he said. The insurer is currently recovering from a 2012 reputational saga involving the payment of Shs13b in pension to Makerere University staff. However, the two institutions have since reached an agreement and this newspaper understands some payments have already been advanced.