SMEs set to list on stock market
The Uganda Securities Exchange (USE) listing categories include: Main Investment Market Segment (MIMS) with 17 listed companies, Alternative Investment Market Segment (AIMS) with no company listed currently and Growth Enterprise Market Segment (GEMS)—expected to be launched this year.
Ugandan Small and Medium Enterprises (SMEs) will soon be able to list shares on the stock market to boost the securities exchange performance.
Uganda Securities Exchange (USE) in collaboration with its overseer body Capital Markets Authority (CMA) will launch a new company listing category - Growth Enterprise Market Segment (GEMS) this year targeting SMEs.
Unlike the Main Investment Market Segment (MIMS), the proposed criteria for listing on GEMS is more flexible as it intends to ensure that interested SMEs also enjoy the benefits of being listed on the stock market.
In an interview, Mr Japheth Katto, the Capital Markets Authority chief executive officer (CEO) told Prosper Magazine that GEMS listing category is a well-timed intiative that will remove the myth among SMEs that the stock exchange is for only big and very rich companies.
“The Growth Enterprise Market Segment (GEMS) is coming at the right time when our stock market needs to be more active. The overall objective of this is to attract more companies to the stock exchange market,” Mr Katto said.
He added; “Companies should also be able to raise business finance through the GEMS category.” Addressing key stock market stakeholders in Kampala last week, the USE CEO Mr Joseph Kitamirike said that the proposed listing will boost businesses that have previously been sidelined.
“We are always looking for ways to help small businesses and those that cannot raise capital. The people who need capital are not yet on the stock market. However, we have not been doing market and capital raising for these people and one of these ways will be the through GEMS.”
Fireworks Advertising managing director Mr Caleb Owino said that the government still has a big role in bringing in more companies. “GEMS is a good idea that will cater for SMEs. However, the authorities in charge should do much ground work to get more companies involved.”
Since its founding in June 1997, USE has 17 companies both local and regional listed on the stock market. If local power distributor-Umeme and other companies float shares this year, the list could grow to 20 companies.
USE has been struggling to improve the stock exchange market performance but has not borne any concrete results. In 2009, USE launched AIMS as a new listing category with less stringent eligibility criteria that would augur well with small to medium sized high growth companies.
