MTN’s listing will breathe fresh air at USE - experts

Wednesday September 15 2021

MTN will before June 22 sell at least 20 per cent of its stake to the public. PHOTO | FILE

By Paul Murungi

MTN’s listing, expected before June 2022, will be a breath of fresh air at the Uganda Securities Exchange (USE), according to market experts. 

MTN is expected to sell 20 per cent of its shares through an Initial Public Offer to fulfil a requirement under the National Broadband Policy. 

USE has in the last 10 years attracted only one listing – Cipla - whose performance has not been vibrant enough to lift up the 24-year Exchange that boosted of 17 listings. 

Experts are also concerned of the continued dominance of a few select institutional investors and poor performance of some counters such as Uchumi, which was recently suspended. 

Speaking in an interview at the weekend, Mr Stephen Kaboyo, the Alpha Capital managing partner, said MTN will be a significant listing, noting the market has experienced long periods of no listing in the last 10 years. 

“We have not seen a company of this magnitude list in the last 24 years,” he said. 


MTN is Uganda’s largest telecom provider, accounting for a market share of about 46 per cent.

The telecom has gross revenue in the excess of Shs1.5 trillion, according to its 2020 financials, which is expected to make it a must buy for many investors. 

MTN is or has already listed elsewhere in its African operations including in Ghana, where it floated about 4.6 billion ordinary shares valued at Shs1.9 trillion or 35 per cent.  

Mr William Nyakatura, the Kinzman Advisory managing partner, told Daily Monitor last week that MTN’s listing is likely to attract new participants who will be seeking to have a share of one of Uganda’s most profitable companies. 

“If the marketing and storytelling is done well, we shall see new shareholders and then, reactivation of old account holders who hold previous stock such as Umeme, dfcu and Stanbic,” he said. 

Mr Nyakatura also noted that the listing is projected to attract strong participation from regional investors, especially large pension firms, Saccos and investment funds. 

However, experts have also wondered whether MTN’s listing will improve activity at the Exchange given that a number of investors have previously bought shares from different companies, before holding onto them thus starving the market. 

However, Mr Nyakatura said that how the market performs will largely depend on the kind of investors, saying: “If there is demand that investors have to return to the secondary market because they did not get enough at the initial public offering, then they will drive retail investors into starting to sell.” 

According to MTN’s financials for the period ended December 2020, the telecom’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) have been widening, growing at 49.5 per cent for over a decade.  

This, according to Mr Kaboyo, gives a proper picture of the telecom’s operational efficiency and growing profitability, which will be a key pick up for intending investors. 

“For every shilling of revenue that MTN earns, there’s a higher multiplier effect for it,” he said. 

No date yet      

MTN has not indicated when it intends to list but analysts familiar with the matter have previously said preparations are in advanced stages. 

Mr Keith Kalyegira, the Capital Markets Authority chief executive officer, told Daily Monitor in an interview the process was ongoing, noting they are currently waiting to receive the company’s prospectus. 

The prospectus will be the final notice to the public detailing the number of shares and allocation, time table of the offer, shares set aside for  Ugandans, dividend payment history and key financial statements.

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