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