USE turnover declines

The drop in the turnover represented an average of Shs110 million.

The difficult macroeconomic environment characterised by high inflation, high lending rates and a volatile foreign exchange market led to the depreciation of the Shilling and slowed down stock market performance.

The turnover dropped from Shs26.4 billion in 2012 from Shs41 billion registered in 2011. This means that during 2012, the secondary equity market performance in terms of turnover dropped by Shs14,344,589,795 . This also implies that the investors in the stock market did not make a lot of money due to the limited number of deals recorded during the year.

A dealer at UAP, Mr Edgar Mutebi attributed the decline to a number of factors: “Factors including crediting of Stanbic bonus shares which dragged on the volume of trading because it took long, resulting into a drop in prices of SBU shares; hence, the decline in the performance of equity market.

Uganda Securities Exchange (USE) explains that the drop in the turnover represented a daily average of approximately Shs110 million. Although the turnover dropped during the year, the number of shares traded rose to 345 million compared to 168 million shares traded in 2011.

USE recorded 3,668 deals in 2012 down from 4,748 in 2011.

Turnover by counter
The turnover by counter indicates that the newly listed Umeme dominated turnover activity in the last quarter of the year, with the counter posting 47.5 per cent of the total turnover, Stanbic bank Uganda came in at second position, posting 31.4 per cent, New Vision Limited, Bank of Baroda Uganda, dfcu group and Uganda Clays Limited accounted for 7.4 per cent, 5.8 per cent, 3.9 per cent and 2.9 per cent respectively.

British American Tobacco Uganda, National Insurance Corporation and Nation Media Group had minimal activity which resulted into 0.8 per cent, 0.4 per cent and 0.02 per cent.

However, in terms of volume of shares traded, Stanbic Bank remained the most active counter registering the highest volume of shares traded due to the second bonus issue that was declared to shareholders. Consequently, the SBU counter accounted for 76.9 per cent of the volume traded during the year.

USE says the All Shares Index maintained a stable outlook in the first quarter of the year of last year. “The ALSI opened at 832.59 in January and further to 992.32 in March. In the second quarter, the index was sustained at an average mark of 1,071.85 before rising to 1,134.73 in September, and 1,186.58 in October respectively,” says USE.

The Chief Executive Officer of Crested Stocks& Securities, Mr Robert H, Baldwin told the Daily Monitor that there was less trading with less value which resulted into low turnover.

moketch@ug.nationmedia.com