At last NIC has started selling its shares

Jan 07, 2010

Last week the Government launched the Initial Public Offering (IPO) or sale of its 40% stake in the National Insurance Corporation (NIC).

Last week the Government launched the Initial Public Offering (IPO) or sale of its 40% stake in the National Insurance Corporation (NIC).

The Government will be unloading its 160 million shares at sh45 a piece in a process that will last till February 5. The shares will then be listed on the Uganda Securities Exchange on March 25.

The selling of shares to the public is part of privatisation process of state enterprises which has taken more than a decade. Uganda Clays, BAT, dfcu, The New Vision, Stanbic are some of the companies the Government has privatised by selling their shares on the stock exchange.

Individuals who have been involved in these share offers have in all, but one case seen good returns on their investment and the process has shown itself to be a useful way for the Government to share in the fortunes of companies it has helped build up since independence.

People are obviously cautioned to do due diligence or solicit the advice of experts before they commit any money to the NIC IPO or any other share for that matter.

It has been a long journey up to this point. People might not remember, but the privatisation process almost failed to take off. A determined presentation to the NRC in 1995 by President Yoweri Museveni made it happen and the benefits are there for all to see. In the last 15 or so years that the process has been in effect, dozens of companies have been sold off.

The new owners have responded by increasing productivity, jobs and taxes to the treasury to the point that shortages of many essential commodities are a thing of the past. Spurred by the forces of supply and demand, we have seen greater innovation as well. Listing on the stock exchange has the added advantage of increasing management’s accountability and transparency.

NIC’s share sale like those before it, is an opportunity for Ugandans to share in the potential growth of the company.

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