Three firms accounted for 99 per cent of the total turnover at the Uganda Securities Exchange in May, a report by brokerage firm Crested Capital shows.
Power distributor Umeme, banking industry leader Stanbic, and tobacco maker British American Tobacco Uganda drove the May activity. The report shows that the market value traded in May grew by six per cent with all the eight locally-listed counters registering activity. Uganda’s bourse has 16 listed firms with eight of them cross lists from Kenya.
At least Shs 19bn was traded with 241.94 million shares exchanging hands. This was an improvement from April’s 35.02 million shares.
“Generally, supply on the market continues to outpace demand on most counters,” said the report. It noted that Stanbic bank had more bids than supply, which saw its share price edge up 4.17 per cent to Shs 25.
Stanbic’s share price had fallen to Shs 21 around April after the bank announced it was cutting by half dividends for 2015 despite posting the most impressive profits in the industry. The bank said it was reserving more money to meet the central bank’s additional capital requirements as one of domestic systematically-important banks.
Patrick Mweheire, Stanbic boss, told shareholders at the annual AGM in May that he was “more concerned about the business direction, and not the share price.”
Umeme accounted for 59.9 per cent (Shs 11.3bn) of the month’s turnover. Stanbic generated Shs 4.95bn in turnover whereas BATU recorded Shs 2.65bn in value traded.
Umeme’s share is still the most popular, with the firm opening up more sub-stations and getting more consumers on board. The prepaid metering system has also reduced the amount of money the company lost to defaulters.
Sam Zzimbe, Umeme’s deputy managing director, told The Observer recently that there was excess demand for power, especially from the industries.
“We are investing in the distribution network, preparing for additional power [from Karuma and Isimba].”
BATU continues to be popular with investors, especially institutions, because of its 100 per cent dividend payout policy. For the last two years, it has paid out all its profits to shareholders.
The firm ceded its leaf buying business in 2014, which, in a way, cut down on operational risks and costs. Its share price is at Shs 30,000. Dfcu bank, Bank of Baroda, and National Insurance Corporation witnessed more offers for sale but demand was lukewarm.