MTN has really helped Uganda, in history, stock exchange and Capital Market have become a major discussion on all media houses

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By Obedgiu Samuel

#UgandaNews #MTN #StockExchange #WhisperEyeNews
@Mtnug could have opted for a “private placement” with the likes of NSSF, but the tricky part of it is that a private placement would not give MTN the responsibility to make all their transactions public for the government to know what they could be up to like an IPO does.

Hence the government left MTN with no choice but to go for an IPO approach instead of a private placement that was preferable by the company. The renewal of their license made their IPO a subsequent condition.

I don’t think President Museveni forced MTN to list on the stock market because he loved Ugandans so much or even to aid the development of the financial markets in this country. Listing on the stock market makes all the financial documents and transactions public, giving Uganda Revenue Authority (URA ) unfettered access when they come to do their routine audits and confirm certain tax returns.

To add to that, it was done to regulate the repatriation of money made in Uganda that MTN was remitting daily at midnight to South African.

What you need to know about an IPO is that Its away a company raises the money it wants in the markets. As a buyer in this case, when you give money to the company (MTN), it will give you shares in return based on the amount of money you have paid. It’s of an advantage if one buys shares now when they are still cheap so that you can sell them off after a few months when the values increases, this is termed as a “Capital Game”. Shareholders shall also benefit from dividends depending on their shareholdings.

Below is how an IPO works. A company first issues out a document called a “prospectus” which explains why it wants to sell off its shares, its current directors, its audited transaction statement, stock markets documents, etc, to the public, which MTN published on its website.

The prospectus has to be approved by a government agency in charge of regulating collective investments and in this case, it is the Uganda Capital Markets Authority.

MTN was also required to get a sole broker and this is how Stanbic Bank came on board to help play certain important roles like Public Relations to explain to the public about the business, to give the company (MTN) money since the business is also exhausting financially especially at its initiation stage, in some cases the broker can even buy shares from the company and sell later to the public, these are the reasons why you see the country director of Stanbic Bank all over in the business.

With the current noise now on both major and local media houses in the country, am sure the values of the shares shall rise sharply. Many Ugandans will blindly buy the shares because they lack technical information about Stock Exchange and Markets or even could be that they have some free Money now, which according to me its a good thing because it will have Stock Markets grow in this country.

This is why in my opinion this is a very good and profitable venture for the short term but not the long term.


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