Uchumi sells 9,000 shares on first debut on Uganda bourse

State Minister for Investment Aston Kajara(L), rings a bell to commence trading of Uchumi Super markets shares on the Uganda Securities Exchange at Golf Course Hotel yesterday. On his right is Uchumi Supermarkets chairperson Khadija Mire and CEO Jonathan Ciano . PHOTO BY FARIDAH KULABAKO

ABOUT 9,158 Uchumi Supermarkets shares were yesterday sold on the first day of trading on the Uganda Securities Exchange.The trading followed regulatory approvals from Capital Markets Authority and the Uganda Securities Exchange to cross-list 265.4 million ordinary shares recently.

According to market information, the retail supermarket stock generated about Shs5.67 million from the sale of the 9,158 shares at Shs620 per share.

Although this is a lower response from the market compared to the Centum Investment Company’s cross-list in 2011 where 800,000 shares were sold on the first day at Shs665 per share, a market analyst said this is because Centum had many institutional buyers yet Uchumi had retail investors.

“Centum’s case was a one-time buy where institutional investors bought in bulk but for Uchumi, it is retail buyers who will keep on coming over a long period of time and this will accumulate with time,” a source who preferred anonymity because he is not authorised to speak on behalf of the company he works with said.

Mr Patrick Ndonye, the general manager UAP Financial Services - the sponsoring brokers, said despite starting with fewer shares, more shares will be transferred to the Uganda market with time depending on demand.

“The Uganda Securities Exchange and the Nairobi Securities Exchange have been working on a mechanism of easing the transfer of shares, meaning that the process of moving shares from one country to another will take a shorter time than it has been,” Mr Ndonye said, adding that Uchumi shares will always be available at USE as long as there is demand.

Uchumi Supermarkets chief executive officer Jonathan Ciano said the decision to cross-list was informed by the conviction that there is huge potential in the Ugandan market.

He said as regional and continental growth gains momentum, it is important that Uchumi shares are made accessible to more stakeholders across the region.

The cross-list provides stock markets investors with a wide range of investment choices.

Regional cross-lists will also be followed by the issuance of a rights issue to further raise a larger pool of capital to finance its growth plans.

It intends to enter the South Sudan and Rwandan retail markets and also open new outlets in Kenya, Uganda and Tanzania.

The regional rights issue seeks to raise between KShs1.5 billion and KShs2.5 billion (about Shs42.75 billion – Shs71.25 billion) for the new 100 million shares.

Mr Ciano said the retail store intends to open a branch in Mbale this year and another one in Mbarara next year.

SOURCE: DAILY MONITOR