Umeme, Stanbic dominate trading at USE
Trading at the USE has been recovering from a slump experienced during the Covid-19 period. Photo / File
What you need to know:
- At least 89.47 percent of the total turnover in May was contributed by Umeme and Stanbic Bank
Umeme contributed three-quarters of the Uganda Securities Exchange (USE)’s market turnover in May, boosted by high dividend issuances and foreign investments.
The power utility company dominated monthly activity, accounting for 67.91 percent of the total turnover on the bourse.
Traders leveraged the slowed inflation at a rate of 6.2 percent in May, down from an earlier elevated 8 percent in April, which had eaten into purchasing power.
“This was attributed to drops recorded in both food crops and energy, fuel and utilities prices, which carry the biggest weights on the consumer price index,” a report by USE reads in part.
The annual inflation for food crops and related items fell from 25.3 percent in April to 15.7 percent in May.
Stanbic Bank followed Umeme, contributing 21.56 percent of market turnover, coming on the back of a dividend declaration of Sh87b.
USE also attributed the increased activity on interbank money movements, which was slightly lower, averaging at 10.46 percent in May, down from 11.17 percent in April.
This saw the total number of shares traded in May increase to 165.51 million, resulting in a market turnover of Shs15.54b, a 141.03 percent increase from the Shs6.45b recorded in the same period last year.
“This turnover represents a daily average of Shs706m. Volumes traded increased to approximately 165.5 million shares compared to 24.8 million shares traded in April,” USE said.
Mr Paul Bwiso, the USE chief executive officer, said: “Increased turnover in May can be mainly attributable to seasonal factors including dividend cycles, end of government financial year and seasonal allocation by fund managers.”
MTN, which contributed 10.43 percent of May’s turnover, was the third-best investment asset followed by National Insurance Corporation, Bank of Baroda and Cipla Quality Chemicals.
Other counters that posted good performance included Dfcu, New Vision Printing and Publishing Limited and Uganda Clays. Each contributed about 0.08 percent.
Mr Bwiso noted that during the period ended December 2022, a number of listed companies, including Bank of Baroda, MTN, Stanbic, Umeme, Dfcu and National Insurance Corporation declared dividends, resulting in increased demand on their counters.
“Investors take positions in this period to best benefit from declared dividends and not miss out on book closure dates,” he said.
During May Bank of Baroda dominated the volume of shares traded per counter, contributing 31.09 percent of traded shares.
However, Umeme dominated on the other hand dominated turnover performance per counter, accounting to 39.33 percent of the total turnover.
Mr Bwiso also indicated that fixed-income securities’ interest rates declined during the period, yet demand for stocks rose, thus the increased activity.
