African Alliance Investment Bank Uganda managing director Ken Kitariko on Friday told the Business Daily that the share rose to a high of Sh9.45 (Ush295) before falling to its opening price of Sh8.81 (Ush275).
The counter moved a total of 647,900 shares on its first day of trading.
African Alliance expects the stock to remain volatile before finding an equilibrium price.
“It is too early to judge but based on activity today, we may see higher prices,” said Mr Kitariko.
African Alliance Uganda was the lead sponsoring broker for the initial public offering (IPO) which was oversubscribed by 36.9 per cent.
In total, investors applied for 229.38 million more shares than were on offer, according to the share allocation results released last week.
A total of 622.37 million shares were on sale in the IPO, which opened on September 20 and closed on November 7, of which 272.37 million subscription shares were issued by the power distributor and Umeme Holdings which is owned by London-based private equity fund Actis sold its 350 million shares.
Listing of the stock lifted the value of all the shares at the Kampala bourse by Sh14.31 billion (Ush446.67 billion), because the company has a total of 1.624 billion issued shares.
Memorable day
The market capitalisation went up to about Sh492 billion (Ush15.35 trillion) compared to its closing value of Sh492 billion (Ush14.91 trillion) on Tuesday according to the Uganda Security Exchange’s latest market report.
“This is a memorable day for Umeme, not only for being one of the largest companies to be listed on Uganda Securities Exchange but also being the first company to uniquely involve consumers in an IPO, through an incentive share system,” said Umeme chairman Patrick Bitature during launch of trading.
He said that as a utility company which offers services to a cross-section of Ugandans, it was important for Umeme to widen its shareholder base to increase the involvement of consumers in its operations.
Mr Bitature also said that the oversubscription of the IPO was a reflection of the confidence the people of Uganda and international investors have in the company.
The IPO has increased the number of shareholders of the power distributor to 6,471 from seven.
The power company has plans to list at the Nairobi Securities Exchange.
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