NIC’s Return To Bourse Excites Investors
NIC’s Return To Bourse Excites Investors
Investors, financial analysts and other stock market operators are returning to the drawing boards to reappraise investment decisions, following the readmission of the National Insurance Corporation (NIC) by the Uganda Securities Exchange (USE), which, on July 15 suspended the company from trading its shares on the bourse.
Stock market watchers are optimistic that the resumption of trading in NIC shares will significantly boost activities on the floor of the stock exchange, especially in the insurance sector as investors and market speculators still consider NIC’s equities a good buy. This will also be a major boost for public confidence in the insurance industry in Uganda.
NIC’s consistent good performance since its partial privatisation to IGI Plc in 2005 and its full privatisation in 2010 and consequent listing on the bourse have accounted for the goodwill that the Corporation continues to enjoy among the investing public.
Its stock was the toast of investors before its suspension by the USE. The Corporation’s share price, which opened at Shs 45 on its listing on the bourse, peaked at Shs 75 before climbing down to Shs70, where it was when it was suspended by the USE. Its record of posting profits and paying dividends to shareholders since 2006 has attracted the interest of individual and institutional investors.
The Corporation, which has at least 2,000 investors, however, experienced a dip in its performance in the first half of 2011, which the Managing Director, Sam Njoroge, attributed to “Negative publicity arising from unresolved issues of the Makerere University Deposit Administration Plan.”
This, notwithstanding, market analysts are optimistic that NIC will bounce back sooner than envisaged, especially with the management’s resolve to dispose of obsolete assets that carry high depreciation charges and erode income flows.
NIC reputed as the payer of the largest quantum of insurance claims in East Africa, with total asset base of Shs 73.324 billion in 2010 remains the strongest and most capitalised quoted insurance company listed on Uganda’s bourse.