MTN Uganda has for six weeks now been offering shares to the public at only UGX 200 per share. On October 11th, 2021 they opened its initial public offer (IPO) of 20% of its shares —an opportunity for the public to apply for a stake in the company, following approvals by the Capital Markets Authority of Uganda (CMA) and the Uganda Securities Exchange (USE).
As the MTN IPO draws closer to end today November 22nd, 2021, Mr. William Nyakatura; a seasoned financial investment advisor with over 10 years work experience in the Capital Markets Industry in the Ugandan, Kenyan and Rwandan Market. Based on his knowledge and expertise on the capital markets, Nyakatura has now been contracted by SBG Securities as a consultant in the MTN IPO.
Nyakatura is one of the people that have applied for MTN shares. He now shares his thoughts on why he has applied for MTN shares. “I had heard so much about shares during an IPO in 2007, but I had no money to invest. When I got my first job in 2008, I decided to buy some shares,” says Mr. Nyakatura.
Being from Hoima, I decided to invest in British American Tobacco, as we are a tobacco growing region. The shares then were at UGX330 each. My cousin too decided to buy shares and we both bought at the same time. By 2013, the share price had steadily risen to UGX2,000 and I couldn’t not resist the temptation to sell my shares. I was very happy at the return I had made and smirked a bit when my cousin wouldn’t sell.
Three years later, my cousin sold his shares at UGX30,000 each. The last laugh really was his.
Over the years I have grown to appreciate the affordability of the stock market as an avenue for long term investment. There are not too many investment options that are affordable and yet yield a return. This is one of the reasons I applied for the MTN shares as soon as the offer opened.
I also considered that this is one of the biggest companies in Uganda, in a vital industry in an economy that relies on communication services. This is important because shares are an investment in the future of a company.
Shares however are not without risk. You cannot really tell what kind of return you will get from a company over time. Past and current performance are not a guarantee of future performance. The very same shares my cousin sold at a return of 1000%, at one point fell from the IPO price of UGX1000 to UGX300. The same shares currently are the most expensive stock on the market.
My most valuable take away from the stock market is the lesson I learned, stocks are a viable opportunity to invest long term.