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Dfcu suspends trading on Ugandan stock market

By Julius Businge

Dfcu bank has suspended its trading for four weeks on the Uganda Securities Exchange (USE) to pave way for Commonwealth Development Corporation (CDC) to sell part of its shares in the bank, an official note released on April 22 in a local daily news paper reads.

CDC holds 60.02% of the company’s shares.

The note says CDC has received an expression of interest for the purchase of substantial number of shares in the company which, if successfully concluded, may have an effect on the price of the company securities.

The suspension is provided for under rule 5(1) c of the USE exchange listing rules.

The note says engagements are being held with several parties with a view to achieving the indicated shareholding. NORFUND (Norwegian Investment Fund) plans to buy and increase its shareholding from the current 10.06% to 27.54%. Rabo Development B.V (a 100% subsidiary of Rabobank of the Netherlands) intends to purchase some shares in the bank.

The note is silent on other parties intending to participate. CDC will retain 15% of the shares, according to the note.

“As a result of potential shareholder restructuring and the time required to obtain all the necessary securities market and banking approvals, dfcu has been granted permission to voluntarily suspend the trading of its shares on the use for the period of up to four weeks with effect from April 22,” the note reads, adding any agreement in this respect will be subject to the necessary regulatory approvals.

Analysts say the development will somewhat slowdown trading at the Kampala based bourse whose trading is dominated by a few busy companies.

USE has 15 companies listed at the moment.

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