Umeme’s share price at the Uganda Securities exchange is maintained at UGX 370 per share. Trading activity remained unhinged with about UGX 18 million worth of shares traded just a day after Parliament adopted a recommendation to terminate the Umeme contract.
Traders at the stock exchange said that most of the shares are held by institutional investors like NSSF, who have been talking to Umeme’s management regarding their investment.
Traders also noted that as long as there is no massive sale of shares by investors, then the price may not change drastically.
Uganda Securities Exchange rules indicate that the CEO of the exchange has the powers to suspend trading when need arises, but mostly to protect investors.
The last time share trading was suspended on any listed company was 2013, when a major shareholder, Actis was selling a major stake in DFCU Bank. This was then done to avoid speculation on the price, which could have increased the cost of purchase.
On Friday, 45,000 Umeme shares were traded. Additionally, there is still outstanding demand for Umeme shares of 242, 565 shares.
On Monday, Umeme had announced a 43percent rise in net profit to 83.7 billion Uganda Shillings in 2013, and also recommended a 24.8 Shillings per share dividend payment to shareholders by June 2014. Umeme also collected money above its target, but fell short on the losses target.
Shortly After the announcement, Parliament adopted a report by its Adhoc committee set up in 2011 to investigate the irregularities within the energy sector.
In its report, the committee recommended that Umeme’s 20 year concession agreement be terminated. The concession was signed in 2005 when the electricity sector was liberalized and Uganda Electricity Board unbundled.
The report findings accused Umeme of breaching the concession terms, failure to bring down power losses and manipulation surrounding the signing of the concession.
When Umeme became a listed company in November 2012, it warned prospective investors of the risks, which among them included the adoption of the Adhoc committee report.
However, Irene Muloni, the energy minister, while responding to the MPs noted that the executive disagrees with the recommendation to terminate Umeme’s concession agreement.