This week I made a first foray into international investments (since a short-lived stint with T. Rowe Price mutual fund) by signing up to buy shares in the Stanbic IPO (Uganda).
Earlier this year a cement company had an IPO in Tanzania but that was not available to Kenyans while the Stanbic offer is. Though earlier marketed as being exclusive to Dyer & Blair (D&B) customers, other brokers have forged links with Ugandan financial institutions to enable more Kenyan’s to participate.
I paid 3/= per share at CFC (plus a 750/= processing fee) while a certain wealthy investor/dentist informs me that D&B has them at 2.85 each as does African Alliance at the same price.
Still, there are some risks of investments mentioned in a D&B analysis including limited trading days at the USE, no CDS system (we’ll get paper share certificates), power rationing could negatively impact company loan repayments, and the Uganda shilling may depreciate against the Kenyan one. Also, dividends will be paid in Uganda shillings (1 KES = 26 Ush) but at least they can be repatriated in full as movement of capital is free.
Stanbic is Uganda’s largest bank and is rated as the highest quality stock ever offered on their stock exchange.