National Insurance to list in Uganda

An initial public offering (IPO) for Uganda’s National Insurance Corporation (NIC www.nic.co.ug) will be launched on 14 January and close on 5 February, according to a report on the Business Daily website (www.businessdailyafrica.com).
Mr Hassan Mohammed, outgoing joint managing director of Dyer and Blair Investment Bank (www.dyerandblair.com), was reported as saying the listing on the Uganda Securities Exchange (www.use.or.ug) will be on 25 March, after a share allotment on 9 March. Mr Japheth Kato, executive director of Uganda’s Capital Markets Authority, is said to have been satisfied with the preparations, including the prospectus.
It will be another step forward for the USE which has dynamic management but a relatively small economy. The bourse has 11 listed firms, compared to 55 listings on the Nairobi Stock Exchange and 15 on the Dar Es Salaam bourse, nearly half of them in recent years. Uganda Clays and New Vision Printing and Publishing Company were listed on the USE in 2008. Kenyans have also invested in recent IPOs, including Stanbic Uganda.
Other IPOs expected in Uganda in the coming months or years include Sheraton Hotel, Kinyara Sugar Works, Barclays Bank Uganda and Kakira Sugar Works, says the newspaper.
Kenyan companies including Kenya Airways, East Africa Breweries, Kenya Commercial Bank and Jubilee Holdings are cross-listed on all three exchanges while Equity Bank is listed in Uganda and Nairobi.
NIC is 45 years old and Uganda’s biggest underwriter. On offer is 40% of the share capital (amounting to 161.6 million shares), priced a USh45 per share (US$0.02/ 2 cents). In 2005, the Government of Uganda sold a 60% stake to Industrial and General Insurance Company Limited of Nigeria.
The listing has been delayed for 3 years due to disputes with the staff association of Makerere University over a pensions fund managed by NIC. This has not yet been fully resolved, according to the report.
The Government has been working with the Uganda Insurers Association to increase insurance penetration which is behind other countries. It has been receiving dividends from NIC. but says it is selling its stake in order to boost development of Uganda’s capital market.

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