Kampala. African Alliance has received approval by Capital Markets Authority to transfer its brokerage business to UAP Old Mutual.
The firm will be exiting brokerage business, according to Mr Kenneth Kitariko, the African Alliance chief executive officer.
In a media conference yesterday, Mr Kitariko announced that the exit of the brokerage business was a result of not making money in that space.
“When the business is not making money, you have to plan for the future and the shareholders were not happy subsidising stock Brokering business anymore,” he said.
Mr Kitariko told Daily Monitor that for 15 years in the brokerage business, the company has not made much money in that space.
“If anyone tells you that in Uganda today they are making money from brokerage, they are telling you a lie.” he said. African Alliance clients will have 14 days within which they will choose another broker to manage their affairs. For those who would not have moved by then their shares will be automatically transferred to UAP Old Mutual.
Mr Samuel Sejjaaka, the UAP Old Mutual Financial Services chairman, said they will use their 176 years of experience and the pan African presence to serve their customers.
He expressed optimism about the market and the economy at large, saying “there is no velocity in the economy and most of the people holding shares in this market are institutional investors who are not interested in selling their shares.”
“Umeme and Stanbic made money but you did not see a lot of price movements meaning that those who hold shares are not putting them on sale in the market,” he said.
Mr Paul Bwiso, the Uganda Securities Exchange chief executive officer, said between 2015 and 2018, the annual turnovers dropped from Shs980b to Shs24b confirming that activity at the bourse has been slow.
According to Mr Kitariko, investors are leaning more towards fixed income instruments as countries use fiscal policy to bolster their currencies. However, he indicated that African Alliance will remain in the market as a financial advisory firm.