Uganda Capital Markets Guide: Find out Where to Invest on the African Stock Exchange

The Uganda Capital Markets along with several African markets have developed tremendously over the last few years.

We have therefore created this Capital Markets Guide to help you take advantage of these Emerging African Stock Markets.

You will review detailed information about the Uganda Securities Exchange (USE) and important news updates about all active African stock Exchanges, including their Trading systems, Stock brokers, listed companies,Trading Statistics and how you can list your company.

Interactive Uganda Stock Analysis Tool

On this Graph you will be able to monitor and analyse the value of your shares for each of the listed companies on the Uganda Securities Exchange.

The the x-axis shows the Volume Weighted Average Price (VWAP) for each listed company in a specified trading session. It is pretty easy to analyse your stock with this graph.

Check this Box to See the Stock Value for Each Listed Company for a particlar trading session when you hoover your mouse over the plotted point.

STOCK VALUE = UGX 0.

You can also try turning some companies on/off , comparing them with each other, and with the ALSI and LCI of Uganda Securities Exchange using the checkboxes below.

Your Stock Analyis Indicators:

The Uganda Stock Market in Offing

The last decade has seen the Ugandan Capital market grow by leaps and bounds. It has witnessed a substantial increase in trading volumes at the Uganda Securities Exchange (USE) and an increase in both equity and debt listings.

The Uganda government’s commencement of bond issuance at the USE has also provided a pricing benchmark for corporate debt instruments.

Additionally, it is during this decade that we have seen the emergence of collective investment schemes in the Uganda Capital market.

The Major players in the Uganda Stock Market Include:

• Uganda Securities Exchange

• Uganda Capital Markets Authority

• Uganda Stock Brokers

• Listed Companies on the USE

• Investors

The Story of the Uganda Securities Exchange (USE)

The Uganda Securities Exchange (USE) was licensed to operate as an approved Stock Exchange in June 1997 by the Uganda Capital Markets Authority.

Following the listing of its maiden instrument the East African Development Bank (EADB) bond in January 1998, Uganda Securities Exchange (USE) has over the past decade posted tremendous growth in terms of listings on the USE, growth in market capitalization, share holder growth and activity turnovers.

To date the Uganda Securities Exchange (USE) boasts of:

• 9 equity listings
• 6 corporate bonds
• And 30 Government bonds.

Over the last 10 years the Uganda Securities Exchange (USE) has raised over Ushs. 103bn from Equities, over Ushs. 90bn from Corporate Bonds and over Ushs. 1.7trillion from Government bonds.

The number of share holders has also increased tremendously in the recent years in terms of participation at the Initial Public Offers (IPOs) and in the secondary market activity on the USE. Current USE market capitalization stands at Ushs. 5.8 trillionregistering an impressive growth in market capitalization over the years from an initial market capitalization of Ushs. 2.3bn registered following the listing of its maiden equity listing Uganda Clays Limited.

The listings on the USE have largely been a product of the Privatization program meaning the challenge for the coming years will be to attract listings from privately heldand family owned businesses.

Uganda Stock Exchange Development Milestones

• 1997: The Licensing of the USE by the Uganda Capital Markets Authority to operate as an approved Stock Exchange in June 1997.

• 1998: The listing of USE’s first security, the Ushs 10 billion 4 year East African Development Bank (EADB) Bond in January 1998.

• 1999: The listing of the 5 year Ushs 8.3 billion PTA Bond in March 1999.

• 2000: The flotation and eventual listing of USE’s first equity, the Uganda Clays Ltd share on the 18th of January. UCL shares were 15% oversubscribed.

• 2000: The flotation of the British American Tobacco (Uganda) Ltd –BATU share through the USE on 28th June. BATU shares were 5% oversubscribed and represented the second divestiture of government held shares in a company to take place through the Exchange.

• 2001: The first ever cross border listing in the East African market occurred with the listing of East African Breweries Ltd (EABL) on the Uganda Capital Market on 27th March. EABL is ranked among the top 10 companies on the Nairobi Stock Exchange (NSE) in terms of capitalization.

• 2002: The listing of the Kenya Airways share on the Uganda Capital Markets on the 28th of March becoming USE’s second cross listed product. The shares currently have Blue chip status on the Nairobi Stock Exchange (NSE).

• 2002: The first flotation of a commercial bank’s shares on the Uganda Capital market occurred on the 2nd September, 2002 when Bank of Baroda offered 20% of its stock to the public through the USE. 80million shares were on sale in multiples of 100 at Ushs 600 per share. Its shares were 16.7 % oversubscribed (making it the best response so far)

• 2002: Official listing of Bank of Baroda Uganda Ltd (BOBU) on the USE on 14th November making it the first financial institution to list on the Uganda Capital Market.

• 2003: The listing of the first tranche (Ushs 24 billion) of the Ushs 54 billion UTL Medium term Note on Uganda Capital Market was on 16th September.

• 2003: The Launch of the USE All Share Index on 23rd October 2003.

• 2004: Official Listing of the 2 year, Ushs 20 billion Uganda Government 20% Coupon Rate Treasury Bond on January 15th making it the first Government Bond to be listed on the USE. Currently there are two 2 year bonds, two 3 year bonds, a 5 year bond and a 10 year bond listed on the stock exchange. Please refer to our Listed Securities page for more information.

• 2004: DFCU group goes public making it was Uganda's second financial institution to list on the Uganda Capital Market.

• 2004: New Vision offers 20% of its shareholding for sale to the public, making it the fifth local company to conduct an IPO in the Ugandan Capital market. New Vision Limited (NVL) is officially listed on 16 Dec 2004.

• 2005: The listing of the 8 year East African Development Bank (EADB) Bond in December 2005.

• 2006: Official cross-listing of Jubilee Holdings Limited (JHL) on the USE on 14th February making it the first insurance institution to list on the Uganda Capital Market.

• 2007: Stanbic Bank Uganda is listed on the USE on 25 Jan following a successful IPO that was 200% over-subscribed.

Click here for more information about USE: including Trade Statistics, Trading Systems , Stock brokers, Listed Companies, and how to list your company.

The Outlook of African Stock Markets

The creation of capital markets in the African continent, was initially made under the impetus of the political will, to mobilize national resources and channel them to productive investments, towards deriving the economic and social growth of the continent.

African Stock Exchanges have also served as a platform for the privatization wave that took place across Africa.

African Capital markets have developed tremendously over the last few years, whereby the number of Stock Exchanges in Africa has almost doubled since 1993 to reach 23 exchanges with the aggregate market capitalization increasing ten folds over that period to record USD 2,170 billion. However, this represents less than 2% of the world market capitalization.

African Equities offer a superior risk Vis-a-vis return profile, which is usually not affected by trends in the developed markets, and provides quite attractive Price - to - Earnings ratios.

So, Why should you Invest in African Stock Markets?

To determine Africa’s investment potential, you need to first look at some of Africa's strong demographic characteristics.

Using East Africa as a microcosm for Africa, it becomes obvious that the sheer growth in population will force heavy investment in agriculture, infrastructure, communications,health care, and education among other baseline investments.

With this investment in these industries will come further development of the African capital markets.

Countries with well developed pension sectors will be at a distinct advantage to others without reform. Pension funds are a national source of capital. They are dependable and long-term (unlike foreign capital flows).

In East Africa you cannot underestimate the tremendous contribution to economic growth the private sector pension fund industry has made to Kenya’s capital market development.

The Uganda Capital Markets are currently still weak due to the absence of pension reform, Uganda has no large pool of domestic long-term capital resources outside the National Social Security Fund (NSSF).

So let’s look at the numbers. The population of East Africa currently at about 130 million people is set to double by 2045.

That is less than a generation away.

There are two ways of looking at this.

The proverbial glass is half-full or half-empty.

Half-empty if you consider that a lack of investment in the country’s infrastructure, food supply chains, education and health care will almost certainly lead to more resource- based power struggles

or Half-full if you consider the number of investment opportunities that will most certainly arise from this growth.

I prefer the half-full approach. Kenya’s median age – the age at which 50% of the population is below – is 18.6 years. Half the population of Kenya is still in high school or below. That half of the population are going to need a cell phone, a bank account, tools of a trade, a tertiary education and anything you can name.

Do you get the picture?

This means that if your business is well managed and has a forward looking management team able to position it on the African continent successfully today, then you're bound to ride on the forthcoming wave of economic growth on the African continent.

Integrating the African Stock Exchanges

Africa has witnessed some regional initiatives in the West, East, South and Central Africa.

This integration simply means that any financial institution in Europe or America , interested in investing in Africa, will find it easier to do business in these regional stock market blocs.

More importantly, it will be easier for stock or Bond issuers in countries within blocs to raise capital in the region to expand their business, thereby bringing market capitalization in line with other well established emerging markets, which in turn would generate a higher foreign interest.

Some of the Regional Stock Market Integration Initiatives include:

• East African Securities Exchanges Association

• African Securities Exchanges Association (ASEA)

Where to Invest on African Stock Exchange

Review the following active Stock Markets in Africa to find promising companies where you can Invest.

You will also find guidelines on how to get listed on these Exchanges so that you can raise Capital from Africa.

• West African Regional Stock Exchange: Bourse Régionale des Valeurs Mobilières (BRVM)

• Algeria : Bourse des Valeurs Mobilieres d'Alger (SGBV)

• Botswana: Botswana Stock Exchange (BSE)

• Cameroon: Douala Stock Exchange (DSX)

• Cape Verde: Bolsa de Valores de Cabo Verde (BVC)

• Egypt: Cairo Stock Exchange (CASE)

• Ghana: Ghana Stock Exchange (GSE)

• Kenya: Nairobi Stock Exchange (NSE)

• Libya: Libyan Stock Exchange (LSM)

• Malawi: Malawi Stock Exchange (MSE)

• Mauritius: The Stock Exchange of Mauritius (SEM)

• Morocco: Casablanca Stock Exchange (Casa SE )

• Mozambique: Maputo Stock Exchange (BVM)

• Namibia: Namibia Stock Exchange (NSX)

• Nigeria: Nigerian Stock Exchange (NSE)

• Rwanda: Rwanda Over The Counter Exchange

• South Africa: Johannesburg Securities Exchange (JSE)

• Sudan: Khartoum Stock Exchange Khartoum (KSE)

• Swaziland: Swaziland Stock Exchange (SSX)

• Tanzania: Dar es Salaam Stock Exchange (DSE)

• Tunisia: Bourse de Tunis (BVMT)

• Uganda: Uganda Securities Exchange (USE)

• Zambia: Lusaka Stock Exchange (LuSE)

• Zimbabwe: Zimbabwe Stock Exchange (ZSE)

On the Equity Market

In this section of the Africa Uganda Capital Markets guide we give you a detailed analysis of the daily performance of the Uganda Securities Exchange and important news updates about the African Security Markets.

Use the free information delivered by our stock analyst to guide your investments in the Uganda Securities Exchange to improve your Returns.

You also have the opportunity to comment on each and every Stock Market report and news article posted on this page so that your voice can influence your stock performance.

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