What to make of the NIC IPO
Uganda’s largest insurance firm, National Insurance Corporation Limited, is offering close to 40 percent of its shares to the public at a cost of Shs 45 per share. The IPO which opened on December 31 is closing on February 5 but with hardly two weeks to the close there isn’t the usual interest and excitement that marked east African IPOs of 2008 and 2009. There are four factors that could account for the cool public reception to the IPO, namely: i. Slow publicity. Although the IPO officially opened on December 31, 2009 the prospectus was not available to the public until about January 6, 2010. This meant investors did not have any information to base their decision on for a whole week. It was again another week after the prospectus came out before any brokerage firm issued its analysis of the IPO. In the meantime the only publicity some of us saw was the newspaper articles from the privatisation unit. ii. The MUASA factor. The Makerere University Academic Staff Association (MUASA) has ...