Capital Markets

Uchumi 3rd Kenyan firm to cross-list on Rwanda exchange

Rwanda’s Permanent Secretary in the Ministry of
Rwanda’s Permanent Secretary in the Ministry of Local Government Vincent Munyeshyaka rings the bell to mark the beginning of trading in Uchumi Shares at the Rwanda Stock Exchange (RSE) witnessed by RSE chairman Dr. James Ndahiro (centre) and Uchumi CEO Jonathan Ciano (right).  

Uchumi Supermarkets became the third Kenyan company to cross-list on the Rwanda Stock Exchange (RSE) moving 3,600 shares on its first day of cross-listing.

Rina Hicks, head operations at Faida Investment Bank, which has an office in Kigali, said that investors traded Uchumi share in lots of 1,000, 2,000 and 600 at Rfw175 (about Sh22.29) Monday’s trading.

On the Nairobi Securities Exchange 86,600 Uchumi share was traded at an average price of Sh21 each.

“Uchumi Supermarkets share began trading on the Rwanda Stock Exchange (RSE) after the retail chain received an approval from the Rwandan authorities to cross list its 265,426,614 shares,” said the RSE in a statement.

Nation Media Group (NMG) and KCB Group are also cross-listed on the RSE.

Nation Media Group, KCB Group, East African Breweries Limited, Kenya Airways and Jubilee Holdings, which are primarily listed on the NSE, are also cross-listed on the Uganda Securities Exchange (USE) and Dar es Salaam Securities Eexchange (DSE).

Centum Investments is also cross-listed at the USE while Umeme, whose primary listing is on the Kampala bourse, is cross-listed at the NSE.

Uchumi is gearing up for a Sh1.5 billion rights issue, and has also applied to cross-list its shares on the DSE and USE where it already has subsidiaries. Cross-listing on all exchanges is meant to increase the pool of potential investors for the planned rights issue.

“As our drive towards regional growth gains momentum, so has our desire to make Uchumi share accessible to more stakeholders across the region,” said Uchumi chief executive Jonathan Ciano in a statement.

The retail chain is raising cash to finance expansion, which will also include opening a branch in Rwanda.

“It is, therefore, timely and ideal that as we plan to set Uchumi branches in this market that we also empower investors here to stake a claim to the ownership of Uchumi, and all our East African Citizens should pride themselves for owing a piece of the supermarkets”, said Mr Ciano.

The supermarket chain plans to sell 100 million shares to shareholders through a rights issue.

In May, Uchumi Supermarkets appointed Faida Investment Bank as the transaction adviser and sponsoring broker, Equity as the receiving bank, Hamilton Harrison & Mathews Advocates as the legal adviser and Ernst &Young as the reporting accountants.

The supermarkets chain’s profit after tax for the full year ended June 2013 jumped 30.31 per cent to Sh357.01 million compared to Sh273.97 million as at June 2012 despite a rise in costs, partly attributed to branch expansion.

The growth, which saw the supermarket’s chain open new branches in Ongata Rongai in Nairobi, Natete in Kampala and at the Eldoret Sugar Plaza resulted in an increase of customer numbers by 10 per cent to 24 million from 22 million.