Telecom listing

Currently, the country has 17 firms listed on the USE compared with 21 listed on the Dar es Salaam Stock Exchange in Tanzania and 63 on the Nairobi Stock Exchange in Kenya.

In June last year, Prime Minister, Ruhakana Rugunda, speaking on behalf of President Yoweri Museveni during the launch of the 10 year Capital Markets Development Master Plan appealed to private entities and public interest companies such as telecommunications and banks to consider listing on the stock market to complement other sources of funding, as well as sell a part of their shares to Ugandans who have supported their growth as customers, suppliers and employees among others.

Many businesses in the country are reluctant to float shares on the USEfor fear of full disclosure, onerous issuance requirements and limited innovation to allow for innovation.

Wave of telecom listings

This development come when a number of African countries are putting pressure on foreign-backed telecom companies to list their shares on the stock exchange as a measure to reduce profit repatriation and enhancing  transparency.

For instance, the Tanzanian government passed a new finance bill in 2016 requiring telecom firms to list at least 25% of their shares on the Dares Salaam Stock Exchange.

As a result of that, Vodacom became the first telecommunication firm in Tanzania to list on the DSE last year and it is expected that India’s Bharti Airtel and Tigo, which have already submitted prospectus to Tanzania’s Capital Markets and Securities Authority will receive approvals for their Initial Public Offerings and list soon.

President John Pombe Magufuli’s administration is targeting at least eight telecom firms to float part of their shares to the stock market including state-owned –Tanzania Telecommunications Company Ltd.

In May this year, MTN Ghana offloaded a 35% stake on the Ghana Stock Exchange as part of the agreement between MTN Ghana and the West Africa country’s National Communications Authority (NCA) in 2015 for MTN Ghana to deploy high speed 4G LTE mobile services to its customers in the country.

At the same time, MTN Nigeria is working out mechanisms to settle its disagreement with the central bank of Nigeria regarding the alleged illegal transfer of about US$8.1billion out of the country before being allowed to list on the Nigerian Stock Market.

The company hopes to list its shares by May next year as part of the settlement of a separate dispute between Nigerian telecommunication regulator and MTN two years ago over unregistered SIM cards.

The pledge helped enable the Johannesburg-based company to reduce the penalty related to that charge to about US$1billion from more than $5billion.