Uganda’s Umeme biggest gainer at the bourse in July

Money Markets

NSE Chief Executive Peter Mwangi at a past event. File 

By CHARLES MWANIKI

In Summary

• The stock rose 54 per cent moving from Sh13 to Sh20. Umeme cross-listed on the NSE from the Uganda Stock Exchange (USE) in December 2012 at a price of Sh8.80.

Umeme, the Ugandan power distributor, was the biggest gainer at the Nairobi Securities Exchange (NSE) last month after liquidity improved on sale of shares held by Actis.

 

The stock rose 54 per cent moving from Sh13 to Sh20. Umeme cross-listed on the NSE from the Uganda Stock Exchange (USE) in December 2012 at a price of Sh8.80.

The share traded for the first time in July with the sharp rise in price indicating investor appetite for the stock.

Traders say when Actis started selling off in May a number of Kenyan investors bought and deposited units in local CDS accounts giving the market float which has spurred July trading.

“We have also been seeing quite a few fund managers asking about the share in the local market in the past month,” said Old Mutual securities analyst Geoffrey Maina.

Data from the Standard Investment Bank shows the Umeme counter saw a turnover of Sh19 million in July, 45 per cent of it by foreign investors’ activity.

READ: PE firm Actis cuts Umeme stake to 14pc

The Umeme stock had remained unchanged at Sh13 for a year before the recent activity. It took seven months from its cross-listing for the stock to register a trade at the NSE in July 2013 when the first 100 shares changed hands at Sh13.

For long the available shares were largely held in the Ugandan depository, meaning local investors lacked sufficient float to actively trade through the NSE. They were forced to open Ugandan CDS accounts to access the stock.

Trading in the stock in Kenya was also hampered by the lack of interconnectivity between the NSE and USE.

Actis revived the stock’s fortune in the Kenyan market through sale of the 60.08 per cent stake worth Sh12.6 billion in Umeme.

Following the rise in price, Umeme’s NSE valuation has risen 54 per cent to Sh32.5 billion for the 1.62 billion shares.

The UK private equity firm said in a statement that 20 Kenyan and Ugandan institutional investors bought Sh7.5 billion worth of shares.

South African and London-based firm Investec, which has 18.47 per cent stake, replaced Actis as the largest shareholder.

Other large shareholders are the NSSF (Uganda) with a 14.27 per cent stake and Farallon Capital with a 7.82 per cent shareholding.