On December 6th, 2021 MTN Uganda was officially listed onto on the Uganda Securities Exchange (USE) during the bell ringing ceremony symbolizing the commencement of trading on the stock market —and a day after its listing, the value of MTN shares soared by 2.5% from UGX200 to UGX205. An increase in share price means an increase in the value of the stock one holds in a company.
Although this looks to be good for the company, Mr. Aeko Ongodia, the Chief Executive Officer of Xeno Investments said it is too early to diagnose the rationale of the price jump. He however noted that it is a common occurrence for newly listed companies to experience a share price jump.
The listing follows a series of events spanning over a six-week period during which the telecom giant announced the offer of its shares to the public.
MTN Uganda floated 4.4 billion shares to the public at an offer price of UGX200 each, in a bid to ensure local participation. The telecom subsequently combed all corners of the country to encourage ordinary Ugandans, “omuntu wa bulijjo’ (layman) to participate in the MTN IPO.
Over 300 town halls and multitudes of media engagements through radio and television aimed at sensitizing the population about the stock market and in particular the MTN IPO were held.
Applying for shares began on October 11th, 2021, and was closed on November 22nd, 2021 at 4 PM EAT.
MTN Uganda through its robust marketing and investor education strategy raised USD$150 million (approximately UGX535 Billion) with 2.9 billion shares allocated to the public.
According to the MTN Uganda Chief Executive Officer, Wim Vanhelleputte, the IPO was a success as it achieved the main goal which was to ensure local participation and ownership by Ugandan investors who share in the company’s growth story.
“This IPO has raised UGX535 billion and that is more than double the previous record on the USE. We have convinced more than 20,000 Ugandan retail investors to participate in the IPO which is also higher than the performance of the previous IPOs. We have convinced 65,000 Ugandans to open SCD accounts. The ownership of the company has grown from only 4% Ugandan ownership to almost 15% so it is an amazing success for MTN,” Vanhelleputte said.
Of the 21,394 applicants for MTN shares at the IPO stage, 20,894 were Ugandan. For emphasis, 87% of the total shares allotted were to Ugandan investors. In addition, MTN had a significant impact on the USE. For example, it more than doubled the number of Securities Central Depository (SCD) accounts which are a prerequisite for participation on the stock market.
Over 70,000 SCD accounts were added onto the stock market during the MTN IPO Offer period compared to slightly over 30,000 accounts that were in existence previously. The increase in SCD accounts is largely attributed to the digitalization of the SCD account opening by the telco. The MTN m-IPO platform allowed users to register for an SCD account using their phones in the comfort of their homes regardless of whether it was a basic, feature, or smartphone.
With the extensive investor education that MTN Uganda undertook and the convenience that it introduced to the stock market, we hope for improved activity at the USE.
Vanhelleputte spearheaded a robust roadshow and marketing campaign involving over 300 town halls, hundreds of media engagements in Uganda and Kenya, managing to raise USD$150 million.
The goal of the IPO, which was to boost local participation was attained as the telecom registered 87% Ugandan investors and boosted the stock exchange with over 65,000 new SCD accounts opened during the period.