Automated stock trading for end of year

By David Mugabe

The Uganda Securities Exchange (USE) hopes to have the electronic trading system running by the third quarter of 2013.

USE chief executive officer Joseph Kitamirike said the current “outcry” method where stock brokers shout out their deal offers will continue until the automation process is complete.

“We are still on track and we hope we deliver before end of the year,” said Kitamirike during the listing of the African Development Bank bond on the market recently.

One of the steps in automating trading on the market was the introduction of the securities central depository system (SCD), which brings an end to paper certificate on the stock market.

The five-day settlement process from the time one places an order with a broker to the time payments and settlements are made is a disincentive to investors.

Currently, trading is only done when one has opened an electronic account with the central depository. Even for corporate action such as bonus offers, investors only get their share allocation after doing the SCD registration. With this process, they can then monitor the performance of their shares from their individual accounts.

USE officials, however, said not all investors have done the SCD registration being undertaken by brokerage firms and the USE, although more than half of the investors have done it.

On the stock market on Tuesday, Stanbic Bank regained its pole position as the most liquid company, selling 1,785,000 shares on a day of relatively lower volumes and value.

Stanbic posted sh44.6m in turnover, trading at a weighted average of sh25 per share.

Stanbic also had the highest demand with bids for over 36.8 million shares. But there were six active companies, including the relatively quieter National Insurance Corporation that sold 43,847 shares to earn the counter over sh1.5m in turnover, trading at an average of sh35 per share.

Overall turnover was sh64m, while over 2.2 million shares were sold.

Umeme, one of the most active counters in recent days, sold 7,326 shares to earn the power distributor sh2.5m in turnover, selling at an average of sh342 per share.

The other active companies were dfcu Bank and Uganda Clays limited (UCL).