The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The Capital Markets Authority (CMA) and Uganda Securities Exchange (USE) report continued growth of the stock market in Uganda, with the sector recovering from the lagging effects of the COVID-19 period.
This has also come with an increase in the return on investments of most stocks, with Bank of Baroda and MTN Uganda, Umeme and Stanbic counters at USE particularly enjoying the first half of the year.
The All Share Index, which measures the growth of the market generally, grew by 25.14 percent to 1,287 points, while the Local Share Index, which measures the performance of only locally listed companies, was even better, increasing by 30.42 percent to 337.8 points.
Paul Bwiso, the Chief Executive Officer at USE, attributed this mainly to increased return on investment with stock prices increasing, payment of dividends and an improving Kenyan shilling.
Bwiso says that for those who are into cashing out shares, the stock market has posed attractive opportunities with high returns on investments, though there is a mixed picture.
While some companies like Uganda Clays and NIC show a drop in share prices compared to the last half year with the same period in 2024, there was a highly positive trend. Generally, most stocks recorded increases in share prices, with Baroda, MTN and offered a return on investments of more than 50 percent, according to Bwiso.
The performance of the market has hardly been affected by the developments around the Umeme counter, which was suspended for two months in April over a disagreement with the government regarding a payout at the end of the company’s electricity distribution concession.
The other was the planned separation of MTN Mobile Money from MTN Uganda, which created two separate entities.
Generally, trading on the USE recorded a 38.5 Billion Shilling turnover, which was minimally higher than the previous period, but the volumes traded grew by 68 percent to 446 million shares in 3,903 deals, according to the records.
Bwiso also noted the growth in the activities in the Government Securities trading segment, which he attributed to the launch of a digital or mobile phone-based trading system, which has greatly helped in the inclusion of retail traders.
The other development was the takeoff of the Commodities Exchange (UCE), which has so far taken on more than 6,000 farmers.
UCE was formed in 1998 as a membership organisation comprised of agricultural sector stakeholders and those supporting export and development of commercial farming in Uganda.
It provides a platform for a physical exchange, facilitating the trading of graded produce like maize, rice beans, coffee, soya, beans, coffee, soya, and sesame, as well as securing financing for farmers, among other services.
So far, Bwiso says, 16 metric tonnes have been traded and hopes that up to 25,000 tonnes will be traded next season.
CMA CEO, Josephine Okui Ossiya, reiterated the Authority’s commitment to innovation, transparency, and investor protection, highlighting several developments like the launch of the first-ever CMA Handbook.
This included research and public education materials on capital markets.
Other developments are the approval of Regulatory Sandbox Guidelines to accelerate innovation, licensing of five commercial banks as securities dealers and introduction of Uganda’s first credit rating agency under CMA.
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