What you need to know:
Players. Active counters included Umeme and Stanbic, among others.
Kampala. The rush to make profit and active participation of institutional investors mainly from foreign economies have seen Uganda Securities Exchange (USE) realising a total turnover of Shs12.798 billion in the first one week of trading in 2016.
Computed statistics at the bourse show the total number of shares traded during the week stood at 24,571,245. The USE All Shares Index (ALSI) increased by 644.58 basis points in the week.
In an interview with Daily Monitor on January 8, USE chief executive officer Paul Bwiso said the stock exchange indeed opened on a high note.
“This is a very significant trading activity to us because in just one week, we have managed to realise a turnover of Shs12 billion. This is quite impressive if compared to December last year when we had a turnover of Shs17 billion for the whole month,” he said.
Mr Bwiso said he is optimistic that the market will do well as the year progresses.
He, however, pointed out that in the beginning, investors take position to do investments in the companies they consider to be profitable based on their financial results.
There are 16 companies listed on the USE with eight companies being locally listed and the other eight cross listed from Kenya.
In the first one week of 2016, the most active counters by volume were UMEME and Stanbic Bank Uganda. The counters that had the largest advances were British American Tobacco Uganda (BATU), Centum (CENT), Kenya Commercial Bank, Kenya Airways, Equity Bank Limited and East African Breweries Limited. Those that had the greatest declines were dfcu, Uchumi and Nation Media Group.
Advances and declines in stock market are the number of stocks that closed at a higher price than the previous day’s close, and the number of stocks that closed at a lower price than the previous day’s close, respectively.
World over, technical analysts, in the stock market, look at advances and declines to analyse the overall behaviour of the stock market, in order to discern volatility and to predict whether a price trend is likely to continue or reverse.
As of January 8, the USE total market capitalisation was Shs27.163 trillion following a pick in some company prices particularly BATU.
On the first day Umeme traded 2,000 shares of seven deals at a price of Shs630 per share which helped it generate a turnover of Shs1,260,000. Stanbic Bank Uganda traded 8,315 shares at price of Shs32 with 8 deals generating Shs266,080 in turnover. Dfcu traded 29 share out of one deal which saw it generating Shs28,420.
The USE All Shares Index (USE ALSI) 1,793.02, the USE Local Company Index (USE LCI) was 412.07 and the total market capitalisation on January 4 was Shs24.509 trillion.
On Friday, the USE All Share Index was up 2.07 per cent to 1851.51 while the USE LCI was stable at 133.17.
Trading on Friday indicates that half of the local listed counters traded with market turnover increasing to Shs6.57 billion from Shs3.4 billion traded on Thursday.
Umeme had 10.02 million shares traded to register a turnover of Shs6.31billion. Its share price held steady at Shs 630.
Stanbic Bank Uganda and DFCU traded 6.45 million shares and 57,590 shares to generate a total turnover of Shs206.26 million and Shs54.71million respectively.
Computed statistics shows that SBU and dfcu share prices were stable at Sh32 and SHS 950 respectively.
Uganda Clays Limited registered a turnover of Shs2.25 million as result of trading 150,000 shares at Shs15 per share.
In an interview with Daily Monitor, institutional trader at Crested Capital Limited Henry Tamale said the stock exchange has been very active in the first week of 2016.
“The most active investors in the market are mostly the institutional investors characterised by foreign participation. There were large volumes on Umeme and BATU,” he said.
He added: “Most people are profit pursuing or profit taking in a company like BATU which has had its share price rising to Shs25,900, Umeme also paid out dividends in December as Christmas bonanza to its shareholders.”
Trade analyst at UAP Edgar Mutebi told Daily Monitor that the market is active but the question was whether this will be sustained in the long term.
“Some of the reasons which brought about this active participation in the market are that the fund managers last closed the year with outstanding money to invest and they are carrying forward by actively investing in the stock market. They are doing institutional cash-in before things could get worse if it happens to be,” he said.
Developments about the stock market from around the world indicate that there were recoveries on Friday after registering worst performance on January 7, 2016.
How world markets performed
US. On Friday statistics from the US market indicted that the big selloff on Wall Street to start 2016 is now the worst four-day start to the year ever for the broad US stock market following repeated waves of selling on Thursday that sent the Dow falling almost 400 points.
Europe. European shares regained some ground on Friday, helped by a stabilisation in Chinese stocks and strong US data; however, persistent worries about China left the region’s markets facing heavy losses for the week.
Asia. Reports on Asia indicate on January 8, Japanese stocks fell on Friday, making the New Year the first since 1949 that opened with five consecutive losing sessions. The Nikkei share average fell 0.4 per cent to 17,697.96 after selling accelerated late in the session.