The Chief Executive Officer of Stanbic Bank, Ms Anne Juuko, has urged Ugandans to buy shares in MTN Uganda, saying the telecom sector is a worthwhile investment when considering the macro-economic and industry environment.
MTN Uganda last Monday announced the opening of its Initial Public Offer for 20% of its company’s shares, an opportunity for the public to apply for stake in the company. Each share costs Shs200.
“The local telco industry has actually experienced rapid growth over the past two years driven in part by the heightened adoption of mobile data and fintech services due to the Covid-19 pandemic,” Ms Juuko says.
“The Pandemic had a positive impact on data usage, especially because a lot of people were working from home. There was, some negative impact on Voice revenue, because of reduced purchasing power during the lock-down months, but this was not significant,” she adds.
The Stanbic Bank CEO adds that the MTN IPO will be the largest IPO in Uganda to date and will contribute to the further development of the capital markets in Uganda, by driving increased trading activity on the USE.
“By introducing the option to purchase shares using Mobile Money, the MTN IPO is expected to drive significant growth in the number of retail investors trading on the exchange from 35,000 to a much larger target,” Ms Juuko says.
Stanbic Bank is a primary dealer, meaning it facilitates the buying and selling of Treasury Bills and Bonds to investors, who do not have access to the primary market. This is referred to as the secondary market.
According to Ms Juuko, there are many benefits associated with owning shares.
“For example, when you buy shares of a company you become a part-owner of that company and therefore will be entitled to get a share of the profits of the company which come in form of dividends. You can also earn capital gains. This refers to the increase in the value of your investment in shares,” she says.