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Bad start for Uganda’s stock market

L-R: Jacqueline Kiwanuka, the chief finance officer at UCL, George Inholo, the MD, Paul Bwiso, the CEO for USE and Andrew Mwima, the head of trading at USE addressing journalists during the 20 years celebrations for UCL trading on the USE. The fanfare event took place on Jan.14 at the USE headquarters in Nakawa. INDEPENDENT/J.BUSINGE

Executives hope that the future is bright as listed entities post profits

Kampala, Uganda | JULIUS BUSINGE | Companies trading on the Uganda Securities Exchange have opened the New Year with poor performance.

Umeme, Quality Chemical Industries Limited (CQCIL) shares have fallen below the Initial Public Offering (IPO) price.

This seems to have prompted Enock Twinoburyo, an economist on Jan.14 to post on his Facebook page saying “spent 100million on CIPLA and now it is about 40million. Stocks can break hearts.”

Umeme and CQCIL are the latest entrants on the stock market having been listed in 2012 and 2018 respectively. And, as a usual, the public expected their presence to cause a buzz on the stock market.

Umeme which went public at a price of Shs275 has seen its price drop to 233 at the end of last year, the same level that has been recorded since the beginning of 2020.

On the other hand, CQCIL has seen its price decline from Shs256 initial public offering price in August 2018 to Shs102 per share.

Other companies including Development Finance Bank of Uganda (DFCU) has not had its price shift from Shs645 per share recorded on the last day of trading (December 31, 2019) as at January 27.

Stanbic Bank has had its price oscillate between Shs24-26 per share from December 31, 2019 to Jan.27. Uganda Clays (UCL) on the other hand, has had its price remain flat at Shs9.5 in the same period.

Bank of Baroda has its price kept at Shs125 in the same period. National Insurance Holdings Limited counter has kept its price almost at the same level of Shs10 per share while New Vision Limited counter has recorded a price of between Shs315 – 319 in the same period.

The insignificant price movements at the market for all the counters means that there is little activity in terms of buying and selling of shares, a trend that has characterized the market over the years, according to market analysts.

Trade statistics from the USE indicates that a total of 5, 317 deals were sealed by nine main counters out of the 17 listed companies from January to December 2019. A turnover of Shs127bn was recorded out of 1.8bn shares traded in the same period.

However, executives for listed companies are optimistic that the future performance on the USE will improve as they work on innovations to grow the business.

Uganda Clays – makers of construction tiles – which was the first to list on the USE in 2000, celebrated 20 years of trading on the market on Jan.20. The company’s managing director, George Inholo told The Independent that whereas the stock price has remained flat, the company is growing and he hopes that shareholders will earn more value going forward.

He, for instance, said the company’s turnover has since 2000 jumped from just Shs3.7bn to Shs30bn last financial year, representing more than 800% growth.

He also said they are working to improve performance of the two factories (Kamonkoli and Kajjansi) to meet the growing demand and make money for shareholders.

He also said that in the year 2000, the company paid Shs250million as dividends but in 2018 the company gave out a total of Shs900million.

“The business has been going through challenges,” he said, adding that going forward, the company has a fully constituted Board of Directors and well trained management team to support growth.

In addition, the company is having a five year strategic plan that will see it become the leading brand for building solutions and innovations, Inholo said.

“This is good news for those wanting to own part of the company,” he said.

He added: “We are very optimistic that the future has never been brighter than what we feel currently and we have an ambitious plan of ensuring that this year things will be driven differently. Buy into the company when the price is still low.”

Paul Bwiso, the chief executive officer for USE told The Independent in an interview that despite the bad beginning of trading on the market, the future is bright for as long as listed entities improve business performance.

He said the USE’s management plan is to be more out-word looking in terms of innovations and engaging listed companies to ensure that investors get value for their money as they participate in trading at the securities market.

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