Capital markets to trade derivatives
Publish Date: Apr 11, 2014
Capital markets to trade derivatives
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By Samuel Sanya

In the words of businessman and philanthropist, Clement Stone: “Aim for the moon. If you miss, you might hit a star.” The East African Securities Regulatory Authorities (EASRA) meeting in Bujumbura seems to have followed the wise counsel of Clement Stone and laid out ambitious targets. Among the goals set at the Bujumbura meeting is the start of derivatives trading.

Keith Kalyegira, Uganda’s Capital Markets Authority (CMA) boss, tasked the meeting to support the development of new products in wider efforts to push market capitalisation to 30% of East Africa’s Gross Domestic Product (GDP).

“We need to move step by step. Before we move to automation of new products, we need to first achieve full automation for the existing products before we promote new products,” said Arthur Nsiko, a securities trader with African Alliance Uganda.

The meeting attended by Capital Markets delegates from Kenya, Tanzania, Uganda, Rwanda and hosts Burundi also discussed the introduction of depository receipts and real estate development trusts.

Closer back home, Charles Nsamba, the acting communication and investor education manager at the Capital Markets Authority (CMA), revealed that Crane Bank has yet to submit a formal application to list on the stock exchange.

This follows previous comments in the media where Crane Bank management said they were looking to list in April.

Trading statistics for the first three months of the year indicate that 158 million shares were traded between January and March, resulting into total turnover of sh16.9b.

Of the total turnover, 49.91% arose from the Umeme counter. Stanbic 22.45%, dfcu 12.95%, BATU 11.04% and BOBU 2.89%.

The All-Share index opened at sh1522.46, hitting a high of 1571.16 in mid-January, before experiencing a slump that saw it hit lows of 1420.16. It rose back to 1503 on 31 March, recording a net decline of 1.28%.

Stanbic and dfcu were the busiest counters by the close of business on Tuesday. dfcu Bank recorded the highest turnover of sh36m on Tuesday from the sale of 30,000 shares. Stanbic traded 300,000 shares for sh9.7m.

The All-Share index dropped to sh1495.83 from sh1506.48 due to cross listed stock as the Local Share index stayed at sh270.9 for two straight days.

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