USE registers improved growth in trading activity

The Uganda Securities Exchange (USE) has registered increased trading activity compared to the same time last year.
The USE opened 2020 more active, recovering from a slow 2019. It recorded increased participation from foreign and institutional investors.
This, according to Mr Andrew Mwima, the USE trade manager, puts the exchange in pool position to post better results than last year.

“There has been an increase in trading compared to [the same period] in 2019. This has been coupled with increases in core market benchmarks as well increased activity from foreign institutional investors,” he said.
Currently, there are 17 listed companies on USE. Nine are local listings while eight are cross listings from Kenya.
Mr Mwima said activity has been largely dominated by large foreign institutional investors who have taken up positions on Stanbic and Umeme counters.
For instance, he said, the USE All Share Index rose from 1800.72 points to 1844.36 points in the first week of 2020, a gain of 2.42 per cent while market capitalisation grew to Shs25.582 trillion.

“Relative to the first week of 2019, the All Share Index lost by 3.59 per cent in the first week of trading with the market capitalisation standing at Shs22.36 trillion,” he said, noting that Shs770.5m was recorded as turnover in the first week of 2020 from a volume of 4.83 million shares and 100 deals. “In 2019, the turnover recorded in the first week was Shs595.8 million from a volume of 10.25 million shares and 70 deals,” he said.
The investment environment, he added, remains strong and appetite for stocks this year is expected to be stronger.

Mr Robert Baldwin, the Crested Capital chief executive officer, said Uganda’s stock market has been registering strong performance since November and continued into January due to increased appetite from foreign institutions. “In December we had a very big trade deal on USE on the dfcu counter when international financial institutions (IFU of Denmark) entered into the market and bought all CDC shares in dfcu. This signifies confidence in the stock market and we hope foreign institutions’ interest in Uganda’s stock market will continue,” he said.

Global outlook
Globally, a research by J.P Morgan said the positive drivers for equity markets will likely continue, at least for the first half of 2020, as the positioning is still light and equity inflows will likely make a comeback.
“Emerging market equities stand to benefit most from a turn in global manufacturing, a phase one trade truce, and from some likely pick-up in China data flows,” said Mr Mislav MateJka, Global Equity Strategist at JPMorgan in the research bulletin.

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