MTN IPO: Six Weeks of activity comes down to one decision By Kenneth Legesi

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Since October 11, when it announced the opening of its offer to the public to acquire shares, The MTN Uganda IPO has taken centre stage, dominating conversation for many in Uganda. There have been webinars, Whatsapp conversations, roadshows and expert analysis. As I have said before, this has created more interest in Uganda’s stock exchange and capital markets which is good. We need this for more investor and local participation in the economy. The variety of opinions is also important for guiding decisions, price discovery and marketability of MTN Uganda shares.


The MTN Uganda IPO, like all that have come before it, presents an opportunity through the stock exchange for one to add to their saving and investment options. Investing is for all people and all ages and one needs to invest to secure their financial goals. Whether in MTN shares or treasury bills and bonds or global shares or real estate, any well informed investments is always good. It is always important to add to and diversify your investment portfolio. Covid-19 has underscored the urgency of having multiple income streams as many business segments bled from the effects of the pandemic and families and households have had to draw on savings and investments to support themselves.


By listing on the stock exchange, MTN will be added to the rosta of investment opportunities available to Ugandans. Uganda’s stock exchanges presents opportunities for Ugandans of all ages, class and incomes through a regulated environment to turn savings into growth through investment. However, to invest on the stock exchange, it is prudent that one does their research, for instance understanding the market, the market players, the regulator, terminology, process and flow of the exchange. As an individual, you also need to examine your risk versus expected investment return to determine how much you should invest in stocks in general and or in a particular company. This is informed by the financial goals that you have set yourself. This should also apply to the MTN IPO as well.


Before you decide to invest, it is important to have done your research which can be done through reading the prospectus and the many reports that have been published by various analysts on the IPO. The prospectus spells out the company’s past, current and future prospects while different analyst opinions make a case for or against the investment and factors to consider.


Like any other investment, it comes with risks and opportunities.


MTN has been in the market for 23 years, is a market leader in an oligopoly telecom industry of Uganda. The acquisition of a second national telecom operator license for 12 years gives it assurance of continued operations in the country and security of future revenue.


There will continue to be a need for voice and data, there is potential and still more opportunity for growth in mobile money. The management team is solid and the company’s five-year track record of paying dividends has demonstrated management’s ability to generate cash to pay it’s investors.


The sector the company plays in means it is well positioned to take advantage of the growth dynamics in the country for example, a young population, adoption of mobile technology and cheaper cost of smartphones.


However, when you invest in a company, you are buying the future including a bet on the market and economy in which the company operates. For MTN Uganda, this means you are betting on the Ugandan economy. Relatedly, there are also some regulatory risks surrounding the renewal of the company’s license for instance, the cost and the terms and conditions. I see the listing on the USE as a way perhaps to mitigate this risk and regulatory concern. The company also has to maintain a team and management that should continue to deliver on the growth strategy set.


Ultimately, whether MTN is a good buy or not is for each individual to determine. Either way, investment decisions should be made after reading and consulting widely on the subject before buying any one stock or company. Investment should be based on unique individual circumstances such as risk, presence of disposable income and financial goals among others. So do your research and make an informed decision.



Kenneth is the Managing Partner and Chief Investment Officer for The 97Fund at Ortus Africa Capital. He is responsible for providing leadership and strategic oversight towards achieving the fund’s vision and mission to harness investment into and finding impactful capital for entrepreneurs and businesses to drive Africa’s growth. Prior to co-founding Ortus Africa Capital, he was a corporate finance advisor and management consultant at Deloitte (UK, East Africa). He advised on a number of assignments including the formation and fundraising of an agribusiness private equity fund domiciled in Uganda which achieved a $20m close. He has advised public and private sector clients across different industries including financial services, technology, infrastructure & real assets and public sector. Previously, Kenneth trained and began his career as a civil and environmental engineer working with engineering firms Atkins Plc (now SNC Lavalin), Black & Veatch, Royal Haskoning and Proman Consult.


Kenneth has co-founded and invested in companies at the early stage including ventures in fintech/e-commerce, research and data analytics, transport & logistics, energy & infrastructure. He is passionate about working with and supporting entrepreneurs to grow through training, mentorship and hands-on venture support which he does by working with various entrepreneur support organisations. He is also the Co-Founder and Trustee of the Kampala Angel Investment Network (KAIN), which is an angel investment network that prepares and matches early stage entrepreneurs in Uganda to angel investors locally and globally. Kenneth holds a BSc Civil Engineering from Makerere University and an Msc Environmental Engineering & Business Management from Imperial College London. He has completed the Chartered Financial Analyst Program and is a CFA Charterholder.















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