Stanbic joins market
Nov 26, 2006
Today Stanbic Bank shares are on sale. The bank is offloading 20% or one billion shares to the public at sh70 each.
By Paul Busharizi
Today Stanbic Bank shares are on sale. The bank is offloading 20% or one billion shares to the public at sh70 each.
This share offer – hopefully the first of more offers by the bank, has suffered a tortuous route up to this point.
Brought to its knees by questionable lending practices in the late eighties, the Uganda Commercial Bank (UCB) suffered a false start with the Malaysian Westmont Bank embroiled in the collapse of Greenland Bank in the late nineties, the bank was taken over by the central bank before being flogged off to South Africa’s Stanbic Bank at the turn of the century.
A complete makeover of the bank in the last four years has turned it around.
After doing such a good job, it is rumoured the new owners have more than recouped their initial $19m investment.
The sale of shares and the anticipated overwhelming demand reflects confidence in the bank’s new management.
Market watchers will record that a few more thousand shareholders will be created with this latest Initial Public Offering (IPO), a situation that will boost market activity and hopefully see assets attain more realistic valuations.
But the masses of new shareholders that will be created by Stanbic share sale could have a more enduring benefit outside the narrow confines of the Uganda Securities Exchange (USE).
In his book “The Lexus and the fig tree,†journalist Thomas Friedman observed that no two countries that have a McDonald’s fast food restaurant have been to war.
McDonald’s represents the presence of a critical mass of middleclass citizens.
The middleclass often refers to the professional, educated and asset-owning class of society.
This class is the bedrock of democracy.
It promotes the values of tolerance towards divergent views, respect for private property and non-aggressive dispute resolution.
The buying of shares will promote the growth of our middleclass.
Buying a share is buying a part of a company.
We buy shares hoping that the company will continue to be profitable, pay us a regular dividend and grow in value.
Shareholders who appreciate this are unlikely to vandalise the company’s assets – isn’t it true that if you want to start a fracas in this town you can’t recruit in Bugolobi, Ntinda or Kololo?
But beyond that shareholders will appreciate that any action that may disrupt the company’s business – violent protest, insurgency or war will affect their company and by extension themselves.
A middle class is unlikely to look to war to resolve its differences.
Through self interest it will be forced to work for the good of all society in pushing legislation to enforce the rule of law, property rights and various freedoms which will have a residual or direct effect on their interests.
The beauty of shares unlike other more involving assets like houses and businesses is that for relatively smaller sums of people can get involved.
And this can be the beginning of a nationwide asset accumulation culture.
As it stands government needs to do more to promote the securities market in this country.
For starters they can dispose of legislation relating to the Central Depository System and hasten pension liberalisation —- which unlock billions of shillings in workers’ savings both of which will ease and increase share trading on the USE.
National stability may be secured by an ubiquitous security apparatus but it is sustained by a population whose self interest is anchored by asset ownership more than out of the goodness of their hearts.
Today Stanbic Bank shares are on sale. The bank is offloading 20% or one billion shares to the public at sh70 each.
This share offer – hopefully the first of more offers by the bank, has suffered a tortuous route up to this point.
Brought to its knees by questionable lending practices in the late eighties, the Uganda Commercial Bank (UCB) suffered a false start with the Malaysian Westmont Bank embroiled in the collapse of Greenland Bank in the late nineties, the bank was taken over by the central bank before being flogged off to South Africa’s Stanbic Bank at the turn of the century.
A complete makeover of the bank in the last four years has turned it around.
After doing such a good job, it is rumoured the new owners have more than recouped their initial $19m investment.
The sale of shares and the anticipated overwhelming demand reflects confidence in the bank’s new management.
Market watchers will record that a few more thousand shareholders will be created with this latest Initial Public Offering (IPO), a situation that will boost market activity and hopefully see assets attain more realistic valuations.
But the masses of new shareholders that will be created by Stanbic share sale could have a more enduring benefit outside the narrow confines of the Uganda Securities Exchange (USE).
In his book “The Lexus and the fig tree,†journalist Thomas Friedman observed that no two countries that have a McDonald’s fast food restaurant have been to war.
McDonald’s represents the presence of a critical mass of middleclass citizens.
The middleclass often refers to the professional, educated and asset-owning class of society.
This class is the bedrock of democracy.
It promotes the values of tolerance towards divergent views, respect for private property and non-aggressive dispute resolution.
The buying of shares will promote the growth of our middleclass.
Buying a share is buying a part of a company.
We buy shares hoping that the company will continue to be profitable, pay us a regular dividend and grow in value.
Shareholders who appreciate this are unlikely to vandalise the company’s assets – isn’t it true that if you want to start a fracas in this town you can’t recruit in Bugolobi, Ntinda or Kololo?
But beyond that shareholders will appreciate that any action that may disrupt the company’s business – violent protest, insurgency or war will affect their company and by extension themselves.
A middle class is unlikely to look to war to resolve its differences.
Through self interest it will be forced to work for the good of all society in pushing legislation to enforce the rule of law, property rights and various freedoms which will have a residual or direct effect on their interests.
The beauty of shares unlike other more involving assets like houses and businesses is that for relatively smaller sums of people can get involved.
And this can be the beginning of a nationwide asset accumulation culture.
As it stands government needs to do more to promote the securities market in this country.
For starters they can dispose of legislation relating to the Central Depository System and hasten pension liberalisation —- which unlock billions of shillings in workers’ savings both of which will ease and increase share trading on the USE.
National stability may be secured by an ubiquitous security apparatus but it is sustained by a population whose self interest is anchored by asset ownership more than out of the goodness of their hearts.