Price mismatch slowing trade on Stanbic counter

By Samuel Sanya

ACTIVITY on the dominant Stanbic Bank (SBU) counter has slowed significantly due to a sh5 mismatch in the price that bidders are offering shareholders.

“Buyers are offering sh20 per share, while sellers want sh25 per share, causing a mismatch in the supply and demand price on bank’s counter,” said Dan Edoma, a securities analyst with the African Alliance Uganda (AAU).

“This has brought down the amounts traded on the SBU counter.”

By the close of business on Tuesday, there was a market high of 17.8 million outstanding offers on the SBU counter, against demand of 32.8 million shares. 

The bank’s share price has remained unchanged at sh25 per share. Only a modest 58,695 shares were traded on the counter for sh1.467 turnover, the third highest amount on the day.

The bank’s share price dropped to sh20 in recent weeks, before climbing back to sh25 per share.

The dfcu Bank counter raked in sh10.6m, the highest on the day, from the sale of 10,625 shares at the sh1,000 per share price, with 39,613 shares sitting unattended in the outstanding offers basket.

“Investors looking to buy into dfcu are mainly focused on the large dividend that the bank pays since its share price does not change very frequently,” Edoma noted in a telephone interview.

He pointed out that the British American Tobacco (BATU) counter has seen a rapid rise in share price to the present sh2,145 per share price, from sh1,950 in recent months, largely due to the promise of a large sh450 dividend.

The BATU counter had 1,900 bids outstanding with no corresponding offers.

“Investors would like to partake of the huge dividend, while shareholders would also want the same, thus the lack of trades on that counter,” Edoma said.

Bank of Baroda (BOBU) has continued to record strong activity, raking in sh1.6m from the sale of 6,504 shares.

The company is trading at sh250 per share, with 5,846 shares in the outstanding bids basket.

Uganda’s leading daily New Vision sold 1,800 shares at the sh600 per share price.

Investors are bidding for 22,982 shares, while outstanding offers remain at nil.

Other counters recorded minimal activity as the all share index dropped to 1124.59, from 1132.11 on a day when a modest sh14.79m was made by investors on the selling side from 77,624 shares.