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Is Uganda's Umeme IPO a Bargain?
Rank: Member Joined: 9/9/2006 Posts: 52 Location: USA
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Hello, everyone! I thought you might be interested in this brief analysis of the Umeme IPO that Mika Davis and Mark Muhumuza helped me out with. Is the Umeme IPO a Bargain?What are your thoughts on the IPO? Will you be participating? Waiting for it to list on the NSE? Or not at all interested in the stock? Happy Investing! Ryan
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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Rank: Elder Joined: 6/20/2007 Posts: 2,037 Location: Lagos, Nigeria
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As a Diasporian, avoid the typical IPO euphoria !!! That is take position after it is listed (both NSE & USE) to avoid problem of over-subscription / refund. Thee shares will easily be available in the secondary market after listing. Besides from my analysis, the IPO price is not a fair value at 275 UGX per share (9.5 Ksh) judging from their previous performance. It may equally go the way of Kengen, Safaricom and others. My Fair Price estimate is 185 UGX about 6.2 Ksh. The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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young wrote: My Fair Price estimate is 185 UGX about 6.2 Ksh. i agree with this though it could go as low as 150UGX about 5kshs! Avoid avoid avoid! The numbers never lie and they don't look good... Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Total rip off by Actis! #AVOID
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Rank: Member Joined: 2/8/2007 Posts: 808
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additionally Umeme is not very far from City Council of Nairobi in corporate reputation terms. Uganda has had massive and insane load shedding for several years now. Umeme has faired poorly as well. The IPP's hardly get paid for Ssevo and have in some instances in the past shut down the power plants until they are paid. In short Uganda's power sector as it stands is very shambolic and very susceptible to politics of the day.
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Rank: Member Joined: 5/8/2008 Posts: 77
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Preliminary results show at least a 35% over subscription
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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On what volume? I have seen this happen where brokers (especially the listing broker) 'collude' to keep the price high for 1-2 sessions but on low volume. Then the decline starts! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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VituVingiSana wrote: On what volume? I have seen this happen where brokers (especially the listing broker) 'collude' to keep the price high for 1-2 sessions but on low volume. Then the decline starts! The value weighted average price (VWAP) is 275/-. The lowest price traded is 270 and highest is 295/-. 
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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the deal wrote:VituVingiSana wrote: On what volume? I have seen this happen where brokers (especially the listing broker) 'collude' to keep the price high for 1-2 sessions but on low volume. Then the decline starts! The value weighted average price (VWAP) is 275/-. The lowest price traded is 270 and highest is 295/-. So if the IPO price was 275 & the VWAP is 270... it means the 'real' price is LOWER than the IPO price? And I understand at closing there were NO bids but plenty of offers! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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VituVingiSana wrote:the deal wrote:VituVingiSana wrote: On what volume? I have seen this happen where brokers (especially the listing broker) 'collude' to keep the price high for 1-2 sessions but on low volume. Then the decline starts! The value weighted average price (VWAP) is 275/-. The lowest price traded is 270 and highest is 295/-. So if the IPO price was 275 & the VWAP is 270... it means the 'real' price is LOWER than the IPO price? And I understand at closing there were NO bids but plenty of offers! Not a flying start but it wont tank considering the number of East Africa institutional investors holding the stock 
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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@thedeal - For many EAC investors, it's already a loss. The UGX has depreciated quite a bit since the IPO. I have a feeling this stock will not move up much in the next 12 months. IMHO, on a KES-adjusted basis KPLC looks better. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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VituVingiSana wrote:@thedeal - For many EAC investors, it's already a loss. The UGX has depreciated quite a bit since the IPO. I have a feeling this stock will not move up much in the next 12 months. IMHO, on a KES-adjusted basis KPLC looks better. Please explain? Investors have been dumping KPLC since announcement...its an advantage to some of us...i can now buy more units at a discounted price thank to the weak UGX...the offer prices today where crazy..way above 300..must be speculators who wanted to make a quick kill.
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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the deal wrote:VituVingiSana wrote:@thedeal - For many EAC investors, it's already a loss. The UGX has depreciated quite a bit since the IPO. I have a feeling this stock will not move up much in the next 12 months. IMHO, on a KES-adjusted basis KPLC looks better. Please explain? Investors have been dumping KPLC since announcement...its an advantage to some of us...i can now buy more units at a discounted price thank to the weak UGX...the offer prices today where crazy..way above 300..must be speculators who wanted to make a quick kill. At today's KPLC prices. As for Umeme, I don't think it will deliver for 2 years unless the electricity biz in UG is liberalized. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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As at 29 November 2012
Shareholder No of shares % ownership
1 Umeme Holdings Limited 975,748,705 60%
2 National Social Security Fund 91,234,700 6%
3 Dazbog Holdings EFC Limited 52,975,000 3%
4 Standard Bank Plc 49,000,000 3%
5 International Finance Corporation 45,220,900 3%
6 Dazbog Holdings BFC Limited 36,400,000 2%
7 Dazbog Holdings AFC Limited 31,850,000 2%
8 Everest Capital Frontier Markets Fund 28,080,000 2%
9 Utilico Emerging Markets Limited 19,000,000 1%
10 Allan Gray Africa Equity (Rand) Fund 17,700,000 1%
Sub-total top 10 shareholders 1,347,209,305 83%
Total shares in issue 1,623,878,005 100%
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Ati expected to list in NSE in Mid Dec http://www.act.is/PressRelease/161
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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647,000 shares traded on debut.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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the deal wrote:647,000 shares traded on debut. ... of which 500,000 shares changed hands at UGX 275. Was that a block trade? Market Maker? Whats the link to a live stream of this market (price vs quantity vs trades)?
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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mwekez@ji wrote:the deal wrote:647,000 shares traded on debut. ... of which 500,000 shares changed hands at UGX 275. Was that a block trade? Market Maker? Whats the link to a live stream of this market (price vs quantity vs trades)? http://www.businessdaily.../-/13umumw/-/index.html UGX has already depreciated vs KES so for a Kenyan investor one is already in negative territory! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Is Uganda's Umeme IPO a Bargain?
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