Uchumi shares began trading on Uganda Security Exchange (USE) yesterday (November 13, 2013) after the retail chain received an approval from the Ugandan authorities to cross list its 265,426,614 ordinary shares at a price to be determined by the market.
Ringing the bell to mark the start of trading in the new shares, Prime Minister of the Republic of Uganda Rt. Hon Patrick Amama Mbabazi thanked Uchumi for showing confidence in the country’s capital market, adding that the move comes on the eve of several regional integration efforts which are key focus areas of the capital markets in the region.
“I would like to thank the management and board of Uchumi Supermarket for taking the decision to list the company on the Uganda Securities Exchange (USE). Our stock market has been greatly supported by Kenyan companies which now constitute half of the listed companies on the USE,” said the PM.
Uchumi will become the 16th company to be listed on the USE and joins other Kenyan companies including Kenya Airways, East African Breweries, KCB, Equity Bank, Nation Media Group, Centum Investment Company, and Jubilee Holdings.
Uchumi Chief Executive Officer Dr. Jonathan Ciano thanked the Uganda Securities Exchange, and the Capital Markets Authority for their support throughout the approval process.
He said Uchumi Board had been motivated by the conviction that there is good potential in the Ugandan market and that the leadership was keen to see the emergence of regional institutions that would support and give credibility to the East African economic integration.
“As our drive towards regional and continental growth gains momentum, so has our desire to make Uchumi shares accessible to more stakeholders across the region. It is, therefore, timely and ideal that as our business settles down and begins to perform in this market that we also empower investors here to stake a claim to the ownership of Uchumi,” he said.
Uchumi entered the Ugandan market in 2002 and has so far established five operational branches in Uganda with the sixth branch planned for opening at the end of this month in Mbale municplaity.
“Alongside that dream to set up a viable business in Uganda, we felt the urgent need to give East Africans the opportunity to share in the success of our business, mainly because we see Uchumi as the organization with the heritage and capacity to belong to and appeal to the people of this region. Today’s ceremony is a culmination of that dream to bring one of East Africa’s largest retail chains to East African investors,” said Dr. Ciano.
Strong Fundamentals
Uchumi has over the past seven years performed consistently well. For the past five years, the group has reported consistent growth which has enabled the Board to pay a dividend to shareholders of about UGX 39.8 (Ksh1.35) for every ordinary share.
“We bring to this market a very good stock backed by strong business fundamentals. I encourage investors in this market to take advantage of this opportunity to own a piece of one of East Africa’s largest indigenous retail chain,” Dr. Ciano said.
The Company is implementing the cross-listing simultaneously in the Uganda Securities Exchange, Rwanda Securities Exchange, and the Dar-es-Salaam Stock Exchange.
“We successfully cross listed Uchumi shares at the Rwanda Securities Exchange on October 14th, 2013. The Dar-es-Salaam project is advancing well and we hope to close all regulatory issues and conduct a similar ceremony there in the very near future” Dr. Ciano said.
Additionally, the company will be seeking more funds through a rights issue to finance its regional growth and expansion programmes, which Dr. Ciano says would be open to the new investors as well.
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