NIC share price shoots up by sh15
Mar 25, 2010
NATIONAL Insurance Corporation (NIC) share price shot up from sh45 to sh60 on its first day of trading at the Uganda Securities Exchange yesterday.
By David Mugabe
NATIONAL Insurance Corporation (NIC) share price shot up from sh45 to sh60 on its first day of trading at the Uganda Securities Exchange yesterday.
This represents a 33% gain on the initial public offer price of sh45, a modest and commendable gain in a single month’s investment, according to top capital market experts.
“NIC had a successful IPO at a difficult time,†said Andrew Owinyi, the chief executive of MBEA Brokerages Services, who were the lead transaction advisors in the NIC listing process.
NIC’s listing process, which occurred at a time when the market volumes fell from sh90b in 2008 to sh18b in 2009, was dogged in negative publicity and controversy.
By market capitalisation, NIC is the fourth largest insurance firm in Uganda.
It continued to defy odds with a fairly impressive debut performance on the stock market.
When Remi Olowude, the chairman of NIC, rung the bell to kick-start trading, dealers scrambled to post their orders on the NIC counter which, as expected, was the most attractive.
In a few minutes, there was already a block offer of five million shares at sh75.
“NIC is inscribing history as the first insurance company to be listed on the USE on a national scale,†Olowude said.
Several small volumes ranging from 2,000 shares to over a million shares were offered at between sh70 to sh90.
But the first deal was struck at sh60.
In the end, 16.7 million shares were sold at a closing price of sh60.
This resulted into a turnover of over sh1b.
This pushed the day’s total turnover to sh1.2b with five other counters; Uganda Clays, Stanbic, The New Vision, BATU and Baroda all trading.
“It has been quite liquid, it is not a bad price even for those who want to enter at this time,†said Harriet Kiwanuka, the USE director for market research and development. There was an offer of five million shares at sh75.
This massive share offer though legal, put a blockade to any seller who wanted to sell at a higher price than sh75.
They could only sell after the five million shares had been snapped up.
But by the close of trading at midday, this block offer had fallen to sh70.
On the whole, there was more supply than demand, a situation market analysts say could even out once “those institutions who have been observing from afar come in.â€
“That is the beauty of the market, on Monday you may come and the market is swamped and overflooded with demand,†said a broker.
Reports also indicate that there was just one active institution, Crane Financial Services, who made the block buy.
Reports indicate that about 50 institutions bought shares at the IPO stage, most of whom had refunds because institutional allotment was low.
Market observers say therefore that although it is too early to tell how the NIC counter will perform, there is a likelihood of institutions returning the market in the subsequent weeks.
NATIONAL Insurance Corporation (NIC) share price shot up from sh45 to sh60 on its first day of trading at the Uganda Securities Exchange yesterday.
This represents a 33% gain on the initial public offer price of sh45, a modest and commendable gain in a single month’s investment, according to top capital market experts.
“NIC had a successful IPO at a difficult time,†said Andrew Owinyi, the chief executive of MBEA Brokerages Services, who were the lead transaction advisors in the NIC listing process.
NIC’s listing process, which occurred at a time when the market volumes fell from sh90b in 2008 to sh18b in 2009, was dogged in negative publicity and controversy.
By market capitalisation, NIC is the fourth largest insurance firm in Uganda.
It continued to defy odds with a fairly impressive debut performance on the stock market.
When Remi Olowude, the chairman of NIC, rung the bell to kick-start trading, dealers scrambled to post their orders on the NIC counter which, as expected, was the most attractive.
In a few minutes, there was already a block offer of five million shares at sh75.
“NIC is inscribing history as the first insurance company to be listed on the USE on a national scale,†Olowude said.
Several small volumes ranging from 2,000 shares to over a million shares were offered at between sh70 to sh90.
But the first deal was struck at sh60.
In the end, 16.7 million shares were sold at a closing price of sh60.
This resulted into a turnover of over sh1b.
This pushed the day’s total turnover to sh1.2b with five other counters; Uganda Clays, Stanbic, The New Vision, BATU and Baroda all trading.
“It has been quite liquid, it is not a bad price even for those who want to enter at this time,†said Harriet Kiwanuka, the USE director for market research and development. There was an offer of five million shares at sh75.
This massive share offer though legal, put a blockade to any seller who wanted to sell at a higher price than sh75.
They could only sell after the five million shares had been snapped up.
But by the close of trading at midday, this block offer had fallen to sh70.
On the whole, there was more supply than demand, a situation market analysts say could even out once “those institutions who have been observing from afar come in.â€
“That is the beauty of the market, on Monday you may come and the market is swamped and overflooded with demand,†said a broker.
Reports also indicate that there was just one active institution, Crane Financial Services, who made the block buy.
Reports indicate that about 50 institutions bought shares at the IPO stage, most of whom had refunds because institutional allotment was low.
Market observers say therefore that although it is too early to tell how the NIC counter will perform, there is a likelihood of institutions returning the market in the subsequent weeks.