Sylvia Juuko
16 July 2008
Kampala — The trading in The New Vision rights issue commenced on Monday at the Uganda Securities Exchange (USE) with over 14 million rights traded. The rights traded at a special counter that registered price fluctuations from a low of sh200, peaking to sh400 before closing at sh255, with a total turnover of sh4.7b.
"Having over 50% of New Vision rights trading on the first day was a positive start.
"The interest was dominated by institutional investors," said Vivian Sekadde, a broker with African Alliance.
The volume of New Vision rights traded pushed the day's turnover to sh4.8b. The company's rights issue offers the shareholders an opportunity to acquire additional shares at a discounted price of sh1,100.
Over 25.5 million additional shares are on offer to existing shareholders. Brokers said shareholders who opt not to take on additional shares can trade them at the bourse.
"It would be good for the shareholders to be aware that they can exercise their rights.
"If they do not want to take up the shares, they can make some money on them by selling them through the USE," said a broker.
Analysts, however, said some shareholders who accumulated shares in anticipation of the rights issue are holding onto them.
"Few people are willing to offload which may make the counter appear illiquid. Even buying the rights from the bourse is not an end.
"You can sell them off again after getting your allotment letter and make some money," said the analyst.
The second day of trading on Tuesday saw 36,699 shares exchanging hands with a turnover of sh8.7m. Uganda Clays and Stanbic Bank counters were also active, pushing the day's turnover to sh1.6b.
The USE All Share Index dropped to 1,065.21 from the Monday's close of 1,079.56.
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