Uganda may not allow Tullow Oil to list on stock exchange

Uganda may not allow Tullow Oil to list on the country’s stock exchange, because it fears, Tullow’s shares could distort views of the market’s performance, the Reuters reported citing a top bourse official.

In January 2010, Tullow Oil, the majority stakeholder in Ghana’s Jubilee oil field, the largest oil field to be discovered in West Africa in the last 10 to 15 years announced palns to list on the stock exchanges in Ghana and Uganda.

Media reports indicated that Tullow Oil had issued a statement in which its Uganda operations general manager Brian Glover said the company was exploring the possibility of listing on the Uganda Securities Exchange (USE). “We had discussions last week and the idea was welcomed by all stakeholders,” he was quoted as saying.

Listing on the Uganda Security Exchange and the Ghana Stock Exchange would reflect the presence Tullow has built up in the two African countries in recent years and would give local people a better chance to get on its share register and potentially share in its success, the Irish Examiner has said.

But Tullow’s intentions to cross-list on the Uganda exchange around next month might not materialize. The Reuters report quoting the CEO of the Uganda Stock Exchange, Simon Rutega said that due to its huge size, Tullow would eclipse all the local stocks and swing the bourse’s All Share Index by huge margins.

“Because of the company’s size we think activity on their counter might misrepresent the true picture of how the bourse is performing and so we’re considering excluding it from our index,” he said.

USE has 11 companies, including five that are cross-listed from the Nairobi Stock Exchange. The bourse’s performance has been steadily improving, though, after a long slump triggered by the global economic crisis.

By Emmanuel K. Dogbevi