Important Allocation Statistics:
Total
Shares on Offer: 622,378,000
Total
Shares applied for: 851,760,820
Status:
Oversubscribed by 36.85%
Total
number of Shareholders: 6,471
Below
we shall go ahead to breakdown and respectively comment on the investor
segments:
Employees and Directors
The
1,310 employees and Directors applied for 25,504,600 shares all of which were
fully allotted. This segment was entitled to Grant shares totaling 13,500,000
just less 400,000 shares were granted making the total Grant shares issued
13,100,000 shares.
Out
of the 1,310 only 225 employees and directors applied for additional shares
besides the Grant therefore all 25,504,600 were amongst the 225 employees and
directors giving them the 10% incentive shares totaling 2,547,900.
Star Traders’ take:
Low
employee turn up for the IPO to pay for shares 225 out of 1,310 is not very
encouraging, though UMEME has some incentive safeguards for employees who hold
their shares, one cannot rule out a dumping spree recall the 13,100,000 shares
whatever else one may call them came at 0/= cost or bonus to staff therefore a
200/- sale amounts to 200% return.
This
segment took up 4% of the allocated 9% for the IPO, therefore undersubscribed.
Retail East Africans and other pools
This
segment attracted 5,002 investors applying for 111,109,700 shares with all
fully allotted therefore no refunds.
The
promised customer incentive 10% shares were 10,103,400 shares from a guaranteed
19,000,000 shares (employees took 2,547,900 shares as well),
Star Traders’ take:
UMEME
customers did not turn up for the shares as they took up on 46% of the
guaranteed 10% incentive shares, this segment took up 18% of the 20% IPO
allocation therefore undersubscribed.
The
lesser take of up the incentive shares which would average out the acquisition
price to 247/- is a plus for price stability as this segment has more leeway to
sell shares- smaller quantities and are non-employee shareholders
East Africa Qualified Institutional
Investors sub-pool
The
138 investors applied for 406,158,100 shares and were allotted 198,463,700
shares a 48.9% oversubscription
Star Traders’ take:
These
being East African companies will have to stick like a duck, with their action
limited to buying more otherwise where will they invest (A dilemma NSSF Uganda
has), they basically sink or rise with the core investor- if Actis ‘catches a
cold they sneeze’, these are the concession bait they will fight to ensure all
is smooth and the earlier Actis courts them the better prospects for UMEME
International pool- THE HERD
Consisted
of only 21 investors applying for 307,988,420 shares getting allotment of
286,300,000 shares a 93% oversubscription.
Star Traders’ take:
Surprisingly
21 investors determined the price, our belief it could have been the reason UMEME’s
allocation results delayed by a full two weeks, as the parliament report on
UMEME was leaked in the mass media, it would have thrown a spanner in the works
if it was revealed then that 21 investors had taken 46% of the IPO.
Our
suspicions of the HERD still remain, they will probably trade amongst one
another, in investors like the World Bank’s private arm IFC they have some
clout and could come in handy regarding socio-politico struggles
UMEME Vs PARLIAMENT and UGANDA
Last
year in 2011, the Government of Uganda’s Parliament undertook to investigate
what really happened in the Privatisation of the then Uganda Electricity Board
the single Power sector player which culminated into 5 independent Companies
UMEME inclusive. In a nutshell Parliament says the contract signed was unfair
to the government of Uganda and therefore her Citizens. No-doubt the contract
whether fair or unfair will be respected however the ‘noise’ could culminate
into the NIC (also listed on the Uganda Stock Market) Vs ‘noisy’ Makerere
University Lectures’ Pension Scheme, where the core investor (in this case the
British government affiliated private equity firm ACTIS) is worn out from non
business challenges.
On
Vs Uganda this will rotate around power tariffs which are to charged in dollars
and varied monthly based on inflation, exchange rate etc etc
1st 5 Trading days
UMEME
shares were listed on Friday the 30th of November 2012, at an
exclusive ceremony at the Sheraton Kampala Hotel.
Day
One: opened at high of 295/- then to low of 270/= closed at average price 275/-
(same as IPO)
Day
two to four: traded steadily between 275/- to 300/- with pending supply at 300/-
Day
Five: Steady at IPO price 275/- with reasonable demand at 275/- and supply at
300/-
Last Word:
We
still maintain the 250-350 trading spread for the UMEME shares, not much excitement
on the bourse yet; could see some briefly once their financials are released
with first three months of 2012; could see a dividend yield of 3% to share
price in the crazy dividend payout policy of 50% is effected for a company in
Growth stage.
Regards
Star
Traders’
Entebbe
