Uganda Securities in Slight Early Dip

It was a relatively quiet March as investors waited for the release of the 2014 company financial results but overall, there was a good start to 2015 in the first quarter, writes EDISON OLOUCH.

The dip in activity in March 2015 was also reflected in the 49.52% reduction in total turnover to Ush 13.64 billion (about $4.6 million) from Ush27.03 billion (about $9.1 million) in February 2015.

Investors’ focus remained on the UMEME (the electricity utility) counter as some sold on profit taking grounds while others looked to position themselves for a potential robust financial performance which could translate into an attractive dividend. The counter saw a total of 23.02 million shares exchanged, generating a turnover of Ush 11.43 billion (83.8% of the month’s total turnover). Its price lost 2.45 percentage points to Ush489 at the end of March as supply on the counter outstripped demand.

Umeme Limited also announced the appointment of Selestino Babungi as the new Managing Director. Also in March, British American Tobacco reported a 240% surge in profit as BAT became the first listed company to publish its financials for the past year. Other companies which published their FY14 audited accounts during the month included Development Finance Corporation of Uganda (DFCU Group) and Stanbic Bank Uganda (SBU).

Overall, the Ugandan bourse witnessed a total of 682 deals in the first quarter of 2015 up from 654 deals registered in the same period last year.

This was matched with a total turnover of Ush56.81 billion ($19.14 million). The two most liquid counters (UMEME and SBU took pole position in terms of turnover contribution with 88% and 7 per cent respectively.

DFCU Group was the quarter’s biggest gainer among the local counters as its price aanced by 21.26% to Ush850 from Ush 701 at the beginning of the year.

There was improved liquidity for medium term notes in the government securities market.

There were a total of three government securities auctions in March 2015. Of these two were Treasury bill auctions while the one was for a bond in which a new five-year (5Y) note was issued thus improving liquidity for the medium term securities (2Y and 5Y).

Rates for the Treasury bills rose marginally overall with the last auction witnessing a low uptake by the Central Bank as only Ush 27.94 billion ($9.41 million) was accepted against the Ush175 billion ($58.94 million) that was on offer.

The Uganda Shilling reached new lows due to a g US Dollar globally coupled with persistently high demand for the greenback in the market.

This led to the Central Bank stepping in on more than one occasion to support the local currency.

Bank of Uganda also assured the public that its macroeconomic framework which was set up in 2011 would be utilized to halt any dangers of inflationary threats.

Source : East African Business Week

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