Trad­ing of Ci­pla shares starts at Uganda bourse

The counter hit a price high of Ush290 ($0.075) while the low­est trad­ing price was Ush260 ($0.068) per share

The East African - - BUSI­NESS -

BERNARD BUSUULWA

for most of last week, with the com­pany’s share price drop­ping slightly to Ush261 ($0.068) by close of trad­ing on Thurs­day. Trad­ing vol­umes on the counter av­er­aged less than 5,000 shares per trad­ing ses­sion last week while to­tal turnover was less than Ush10 mil­lion ($2,611) per trad­ing ses­sion, mar­ket trad­ing re­ports show.

“Ci­pla Qual­ity shares are cur­rently trad­ing at Ush260 ($0.068), Ush250 ($0.065) and Ush290 ($0.075) ac­cord­ing to var­i­ous deals done by stock­bro­kers. Some in­vestors want to sell their shares at Ush400 ($0.104) and Ush450 ($0.118) per share, and are hold­ing out for a higher price an­tic­i­pated in com­ing weeks. I ex­pect Ci­pla’s share price to reach Ush300 ($0.078) af­ter a week’s time in light of cur­rent trad­ing mo­men­tum on its counter,” said Isaac Mwigo, a stock­bro­ker at Eq­uity Stock­bro­kers Ltd.

Out of 657,179,319 shares on of­fer, in­vestors took up 649,384,486 shares rep­re­sent­ing a sub­scrip­tion rate of 98.81 per cent. The to­tal amount of money raised from the IPO stood at Ush166,567,120,659 ($43.6 mil­lion), ac­cord­ing to the com­pany’s data.

The phar­ma­ceu­ti­cal com­pany’s list­ing ended a nearly six-year IPO drought at the lo­cal bourse and also raised the num­ber of lo­cally listed com­pa­nies to nine. Other lo­cal listed com­pa­nies are Uganda Clays Ltd, Bri­tish Amer­i­can To­bacco, New Vi­sion Ltd, DFCU Ltd, NIC Hold­ings, Stan­bic Bank Uganda, Bank of Bar­oda and Umeme Ltd, which was listed on Novem­ber 30, 2012.

“This new list­ing will def­i­nitely boost our trad­ing vol­umes for the rest of the year. As a re­sult, the exchange’s turnover could grow sig­nif­i­cantly and even­tu­ally in­crease our prof­its. We have also learnt the im­por­tance of en­gag­ing is­suers and their trans­ac­tion ad­vis­ers dili­gently dur­ing the process of pre­par­ing com­pa­nies to list on the stock­mar­ket af­ter a long IPO drought,” said Paul Bwiso, USE’S chief ex­ec­u­tive of­fi­cer.

The Ci­pla Qual­ity Chem­i­cals IPO was plagued by few me­dia ap­pear­ances on lo­cal ra­dio and tele­vi­sion sta­tions by com­pany ex­ec­u­tives as trans­ac­tion ad­vis­ers paid more at­ten­tion to large in­vestors. This partly af­fected re­tail up­take lev­els dur­ing the of­fer pe­riod that ended on Au­gust 28.

Hos­tile so­cial me­dia responses to­wards the com­pany’s IPO, par­tic­u­larly by Face­book and Whatsapp users, also af­fected its per­for­mance.

Pic­ture: File

Stock traders at the USE in Kampala. The drug com­pany’s IPO was ham­pered by a weak mar­ket­ing strat­egy and blow­back on so­cial me­dia.

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