Tuesday, October 23, 2012

Investing on the Uganda Securities Exchange....UMEME IPO

Hey Dolls,

Hoping to raise capital on the Ugandan market, Umeme, a power distributing company, has made an  Initial Public Offer (IPO) following approval from the Capital Markets Authority and the Uganda Securities Exchange (USE). About 622.38 million shares are being sold at Shs 275 each. The last time the USE had an IPO offer was 3 years ago. I was living hand to mouth then and had no savings to speak of. This time round I am well equipped.I have been religiously putting aside money for the baby. I don't believe in just letting it sit on a bank  account making the institution richer while it earns pitiful interest so this is a superb opportunity for me/baby(It's not my money technically).

I am quite reliably informed on the happenings of the stock exchange as a result of my own research and taking part in a few financial workshops so this is an easy decision for me to take. But this morning, I decide to look at this IPO from a layman's point of view. So I set about reading up on the offer and the USE in general. At first I was shocked, then alarmed, now am truly sickened. The level of financial illiteracy in this country is deeply waring. It has been barely covered by the country's dailies of which many of them are giving biased information. Do they not have an economic analyst in their employ? Then there's hardly any information about investing on the USE aside from basic how to's from their site and a few articles from bloggers here and there. Compared to our Kenyan neighbor's, this situation is pathetic but I guess it makes sense since half(yes, half) of the retail investors on the USE are Kenyan(unreliable info from a broker on the USE).

 I weep for my beloved country.

If you are interested in the USE, try the links below. They should give you a good head start;

For the UMEME IPO;


  1. I'm generally not one to rush to buy into IPOs. Stock Market discipline teaches to wait at least a quarter or two and then having some performance data to make a better decision on whether or not the stock is worth buying. That and a couple of other indicators. Its why I never bought into Facebook when everybody thought it would be the next big thing and propeller their investment into killer profits. You know the rest of the story. From its initial IPO price, the stock tanked.

    I'm curious though, how much information can one get about daily/weekly/monthly/etc market trends on USE and specific stock, and how easy is it to get ? And has UMEME's price gone up since your post a couple of months ago ?

  2. Hey Wendal,

    Glad to see you're still reading. Information from the USE can be got from the USE website (URL is in the post), you can sign up to receive a newsletter from them as well. Not too sure about that as I haven't signed up. Most reliable source of information is from the brokerage firms. Mine is African Alliance. I get an email from them daily about the market.The Umeme stock has gone up. It went up as soon as it was listed to 300 Shs. Then it went back down to the original IPO price during the holiday. It went up at the start of January to 300Shs and it has been there for the past one week. This means those who got alot of bonus shares are making a killing.