Sluggish Activity At Uganda Exchange

Subdued activity on the Umeme counter last week following the dividend book closure the previous week, reduced the total turnover registered at the Uganda Securities Exchange last week.

The turnover during the week stood at Ush571.8 million (about $230,000) down from the previous week’s Ush16.8 billion. The total number of shares traded also reduced from the previous week’s Ush 51.5 million to Ush 13.9 million.

The week’s session closed with the All Share Index at 1630.05 up by 64.52 basis points while the Local Share Index closed at 269.05 up by 74.138 basis points. Five Stocks aanced while six declined an aance to decline ratio of 5 to 6. Five counters remained flat during the session.

The most active counters by volume were Stanbic Bank Uganda and UMEME The counters that aanced included UMEME, NIC and UCHM. The decliners included DFCU, CENT and NMG.

Arthur Nsiko, a securities Analyst at African Alliance says that the limited activity was because investors on the Umeme counter were reluctant to trade given that the dividend book closure date of the company had passed.

“The previous week also marked the final week of the offer to East African retail investors. So there was a lot of activity,” he explains.

He also added that the market was not in any way affected going into the budget week given that “our market is still illiquid.”

Local and regional retail investors were given the opportunity to purchase Umeme shares at the same price offered to institutional investors and in addition benefited from one free share for every ten purchased. The sale was structured to ensure smaller investors were given their full allocation. According to Umeme management, close to 500 retail investors participated in the offer.

The shares purchased were worth Ush33.8b by the Ugandan and regional retail investors as well the Umeme management and directors.

Umeme’s directors and managers invested Ush15.4 billion in the share purchase and have increased their shareholding in the Company to approximately 5% from 2%.

Umeme Holdings Limited retains residual shareholding of 14.3% and will remain the second largest shareholder in Umeme.

Umeme’s Managing Director Charles Chapman commented in a press release, “The g uptake by management demonstrates the team’s commitment to continue to grow our business. We welcome all our new investors and reassure all shareholders of our focus on delivering on our investment programme and regulatory targets for 2014.”

Source : East African Business Week

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