Monday, March 29, 2010

NIC disappoints on day two of Trading

NIC's turnover on day two of trading dipped; from 1,002,540,000 Ugx on day one to a miserable 269,892 Ugx on day two. A massive difference of 1,002,270,108 a clear sign of market manipulation.

The NIC counter moved 4,410 shares at 60 Ugx maintaining its IPO day one price, the day trade was between African Alliance-buying and Dyer and Blair-selling.
Outstanding bids were 139,840 shares at a bid prices between 50-55 Ugx whereas outstanding offers totaled to 3,461,590 shares at an offer price between 60-70 Ugx.

Notably day one's market marker Crane Financials was missing in action a clear indication that day one had everything to do with Mr Sudhir Ruparelia legally manipulating the market.
Ofcourse the guys at the Exchange will tell you, "this is how markets behave"- But Star Traders' does not buy such reasoning- infact Star Traders' is launching an investigation in this circus from:
-Whether the allocation results were really genuine?
Otherwise how can you explain such a movement

Thursday, March 25, 2010

NIC share appreciates by 33% on day One

NIC shares jumped from their IPO price of 45 Ugx to 60 Ugx on day one, With 16,709,000 shares exchanging hands accounting for 1,002,540,000 Ugx in turnover which is almost 14% of the Total value of the IPO at 7,269,840,000 Ugx certainly this is commendable Turnover.Below is a picture of actual trade on the USE board.

NIC Counter at the Uganda Securities Exchange trading board 25.03.2010
(Muhimbise A.)

Press Conference;
Usual formalities, with the Lead Broker MBEA passing on the blame for delay in certificates to the Agents distribution capability, Star Traders' confronted MBEA on this.
It is absurd but Star Traders' fought tooth and nail to ensure that there was no Market supply 'monopoly'.
The real reason for delay is that a signatory for certificates from the NIC was not available, could it have been delibarate??- Star Traders' does not believe in this simplistic reasoning.

Food for thought.
Crane Financial Services who accounted for 99.8% of all trade with a bigger portion of shares being traded between Crane and Crane, it brought back some memories of the battle during the initial Privatisation of 60% of NIC, where the Nigerians were on one side and Mr Sudhir Ruparelia the proprietor of Crane Financial Services on the other, you can say the man has got his chance now!

Tuesday, March 23, 2010


Akin to its newest slogan-Moving Forward, Stanbic Bank has declared a dividend of 13.08 for year end 2009 compared to 5.86 for year end 2008.
In a show of resilience its profit after tax edged up by 21% from 78,550 million UgX in 2008 to 95,298 million UgX in 2009.

Market Impact
At the Stock Market the share price moved from 178 ugx in the previous trading session on 22.03.2010 to 200 ugx today 23.03.2010 with shares worth 6,000,000 ugx exchanging hands, this jump is a clear indication of the confusion in the investment fraternity as regards dividends- as explained below.
Star Traders' is expecting more sober impact in the weeks to come, thursday 25 will be overshadowed by NIC primary listing.

Investors note that Stanbic paid out a half year (June 2009) dividend 5.27 ugx gross-this is the first time a company has paid out a periodic dividend in less than 12 months at the Stock Market in Uganda therefore for the second half the actual dividend proposed is 7.81 ugx gross therefore bringing the total gross dividend for the financial yera 2009 to 13.08 ugx gross (withholding tax on dividend is 10% for Listed companies).

Star Traders' feels Stanbic has thrown caution to the wind as regards the financial meltdown that led them to declare a cautious dividend less than 30% earnings per share in 2008 compared to the over 70% dividend payout at the end of 2009.

Saturday, March 20, 2010

NIC Certificates; Will the Small Investors' Trade on 1st Day?

The NIC IPO seems to move hand-in-hand with controversy or incompetence as ably demonstrated from the constant delays (most likely deliberate) from both NIC and the Lead Broker MBEA.

Just follow this sequence of events;

Allocation announcement
As per the Prospectus Allocation Results were to be released on 9th March 2010, these were released a few minutes to the close of business on the 9th March 2010 which tranlstes to the 10th of March 2010 and only the State owned media house (NIC holds a sizeable amount of shares in the New Vision Limited) New Vision run this story, WHY?

Refund and Certificate date
The prospectus clearly states Refund and Certificate Collection date as the 18th March 2010, well by close of business on the 19th March 2010 there was no word on the certificates being available at any of the participating brokers or other agents and no official announcement from MBEA for that matter.

Was/Is MBEA up to task?
Ofcourse MBEA has smoothly underatken previous IPOs, which raises questions on this NIC!
NIC the company and MBEA ought to be put on spot for their incapability to issue less than 2,500 certificates in a period between 5th February 2010 to the 19th February 2010 that is 40 calendar days, far less in comparison to Uganda's biggest IPO Stanbic Bank which issued over 20,000 certificates in a lesser time period yet with 10 times more certificates issued;
unless there are 'issues'which we shall obviously get to know (The Independent’s Patrick Kagenda in one of his articles hinted on a lead that ought to be uncovered)
NIC and MBEA we are watching your every step, this will not be acceptable to Star Traders’ and all the other smaller investors especially due to your incompetence or ‘shrewdness’, otherwise we propose a suitable trading date be set in regard to the above circumstances.

Monopolistic tendencies
With the benefit of hindsight, this brings to light the exact tactics that were used by Dyer and Blair Kampala brokerage firm during the New Vision Limited’s rights’ issue, which only sophiscated investors realised and that was after it had already happened. Such shall nolonger go on unchallenged!

The catch is here.
On Uganda’s Stock market to sell shares; you present your physical certificate to your broker, who delivers it to the registrar (Deloitte) to verify its authenticity this takes around 3 working days, then your broker can sell.
Fellow Investors if you get your certificate on Monday the 22nd March 2010 you are most likely to miss out on the 1st day trading window slated for the 25th March 2010.
If all stays constant; Guess who will be able to sell, Your guess is as good as Mine.

Wednesday, March 10, 2010

NIC Uganda IPO Share Allocation Results

NIC IPO is over subscribed by 31.97%.

Individuals applications for up to 2,000,000 shares to be allotted 100% of shares applied for that is 90,000,000 Uganda shillings worth of shares.

Institution applications for up to 808,000 shares to be allotted 100% of shares applied for that is 36,360,000 Uganda shillings.

Application details
2,415 total applications were received, 2,289 were from individuals and 57 from
corporations /institutions.
Allocation results have been released by the Privatization Unit
(PU) and priority has been given to individual investors.

Certificates to be ready for collection from your broker/dealer after 18th-03-2010.

Trading in NIC shares on the Uganda Securities Exchange will commence on the 25th March 2010.