In May 2023, UMEME Limited counter dominated monthly activity, accounting for 67.91% of the total Uganda Securities Exchange (USE) turnover followed by Stanbic Bank Uganda (SBU) with 21.56%.
In third position was MTN Uganda Limited (MTNU) with 10.43% contribution to the month’s turnover and National Insurance Corporation (NIC) in fourth position with 0.08%. Bank of Baroda (BOBU), Cipla Quality Chemicals Uganda Limited (CQCIL), DFCU Limited (DFCU).
New Vision Printing and Publishing Limited (NVL) and Uganda Clays Limited all traded a combined total of 0.02% of total turnover.
According to the report, the total trading volume for May 2023 was 165,510,482 shares with a turnover of UGX 15,541,482,879.
“This month’s turnover performance showed a 141.03% increase from the UGX 6,448,037,343 recorded in May 2022. Activity in May increased by 408.25% in comparison with the turnover registered in April 2023, from 3.06 billion to 15.54 billion,” the report reads in part.
This turnover represents a daily average turnover of UGX 706 million.
Volume traded increased to approximately 165.5 million shares compared to 24.8 million shares traded in April 2023. The number of deals increased to 501 deals from 493 deals executed in April 2023.
Annual inflation according to a report from Uganda Bureau of Statistics (UBOS) measured by the consumer price index of Uganda for the 12 months to May 2023 printed at 6.2% compared to 8.00% registered in the 12 months to April 2023.
“This was attributed to drops recorded in both Food Crops and Energy, Fuel and Utilities prices. These also carry the biggest weights on the index. Year on year Annual Food Crops and Related Items Inflation decreased to 15.7% in the 12 months to May 2023, down from 25.3% registered in the year ended April 2023.”
Annual Energy Fuel and Utilities (EFU) Inflation registered at 0.9% for the 12 months to May 2023, compared to 2.1% registered in the year ended March 2023.
Mr Paul Bwiso, the USE chief executive officer, said: “Increased turnover in May can be mainly attributable to seasonal factors including dividend cycles, end of government financial year and seasonal allocation by fund managers.”
He also revealed that fixed-income securities’ interest rates declined during the period, yet demand for stocks rose, thus the increased activity.
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The Uganda Securities Exchange (USE) was established in 1997 as a company limited by guarantee, and was licensed in 1998 by the Capital Markets Authority to operate as an approved securities exchange
Efforts to demutualise the Uganda Securities Exchange have been underway since 2007. Following the passing of the Capital Markets Authority (Amendment) Act 2016 on 20 May 2016, demutualization became a regulatory requirement that had to be fulfilled by 20th May 2018. The Exchange was granted an approval to operate a demutualised stock exchange by the Capital Markets Authority on 30th August 2017. Demutualisation facilitates the creation of uniform corporate structures for the Exchange, reduces the incidence of conflict between the governing bodies and the management of the Exchange by seeking to separate trading rights from membership and enables the Exchange to be listed on the stock market.
Demutualisation has also opened up the directorship of the Exchange to parties, other than trading participants. These shall include listed entities and independent non executive directors.
The Exchange is a central place for trading of securities by licensed brokers/dealers. It provides a credible platform for raising of capital; through the issuance of appropriate debt, equity and other instruments to the investing public. In this way, the Exchange provides essential facilities for the private sector and government to raise money for business expansion and enables the public to own shares in companies listed on the Exchange.