MTN Uganda selling 20% shares to EAC investors

Uganda's government recently issued a directive mandating telecom operators to list a fifth of their shares on the Uganda Securities Exchange to provide locals with opportunities to benefit from the sector's profits. This move has paved the way for East African investors to purchase shares in MTN Uganda as the telecom giant plans to sell a 20% equity stake on the local bourse. The Uganda Securities Exchange aims to double the number of investors opening Securities Central Depository Accounts. Analyst Charles Bwogi shed light on these developments in a recent interview with CNBC Africa. The directive by the government seeks to promote greater local participation in the ownership of major companies operating in the country, particularly in the lucrative telecommunications sector. By requiring telecom companies to list a portion of their shares, the government aims to ensure that resources are mobilized within the local market. Charles Bwogi highlighted that the directive suggests listing at least 20% of the company's shares on the exchange, with a specific focus on allowing East African investors to participate in the ownership of these companies. When assessing the current investor landscape on the Uganda Securities Exchange, Bwogi noted a decline in performance, attributing this trend to the exit of offshore investors. He emphasized the importance of attracting high-performing companies to the exchange to stimulate activity and interest among both local and regional investors. Bwogi highlighted the need for increased awareness about investment opportunities in the stock market to mobilize capital and enhance market participation. Addressing the significance of expanding the investor base, Bwogi stressed the importance of doubling the number of investors opening Securities Central Depository Accounts. While acknowledging some progress in this area, he underscored the need for a more concerted effort to encourage broader participation and overcome existing obstacles in the market. Bwogi expressed concern over the dominance of a single company accounting for a substantial portion of trading activity on the exchange, citing the need to diversify investments and attract a more diverse range of investors to support market growth. In conclusion, Bwogi highlighted the urgency for comprehensive measures to revitalize the Uganda Securities Exchange and promote greater inclusivity in the capital market. By encouraging local and regional investors to engage in stock ownership, the exchange can foster economic growth and strengthen the investment landscape in Uganda. The government's directive to telecom operators signals a strategic shift towards fostering indigenous participation in key sectors, signaling a positive outlook for the future of the country's capital market.