Bourse perfomed best in 2010
Dec 19, 2010
THE Uganda Securities Exchange (USE) recorded the highest return by November with investors who bought shares in January pocketing an average of 60% in gains.
By David Mugabe
THE Uganda Securities Exchange (USE) recorded the highest return by November with investors who bought shares in January pocketing an average of 60% in gains.
This means if one bought shares worth sh1,000 in January on a high value company like Stanbic Bank, they picked a profit of sh600 by November.
“It was because the prices fell really low in 2008 and they fell further in 2009. When prices normalise, it is a very strong recovery because of the fall,†said Joseph Kitamirike, the USE boss.
Stanbic Bank shares traded at sh160 in January, but were selling at sh265 by close of the day’s business on December 16.
Bank of Baroda traded at an average of sh300 per share in January, but this was up at sh500 by the end of the trading session last Thursday.
British American Tobacco Uganda, one of the biggest gainers this year, has also risen to sh1,740 per share, from just sh270 in January.
Kitamirke said the year 2010 had seen the stock market recover and investor confidence return as the exchange finally saw the back of the trickledown effects of the global financial crisis that saw many companies shed off value.
The USE returns have risen from -3% in 2009 to 63.1%, the highest in Africa by November 5, 2010. Kenya was second at 42.5%, while Tanzania, Zimbabwe and Malawi registered some of the lowest returns.
“It has put us in a position where we can think of accelerating listing. We expect at least three new listings next year,†said Kitamirike.
He said the 2011 listings will be substantial to change the market.
The USE all-share index (ALSI) also shot up to 74% between January and November, compared to a similar period in 2009.
The ALSI is a barometer that tracks the performance of the exchange. The 2010 performance shows the steady recovery of the bourse in the last 12 months.
This is in comparison to a similar period two years ago when trade volumes and value witnessed major declines due to the global debt meltdown.
Turnover shot up 51.6% to sh27.6b from January to November, compared to a similar period in 2009, when it stood at sh18.2b. Daily average turnover rose to 56.3% from sh132b to sh207b per day.
However, trading results in the third quarter of 2010 posted a decline in performance with the total turnover, dropping to sh3.9b from the previous quarter’s sh8.6b, while volumes recorded a drop of approximately 65% from 67.7 million shares in the second quarter to 23.1 million.
Number of deals stood at 1,053, down from 1,516. September registered the highest level of activity of sh1.7b, accounting for 44.2% of the quarter’s total turnover.
National Insurance Corporation (NIC) was listed on the exchange on March 21, becoming the 12th company to trade on the USE.
Its share price rose to sh60 from sh45 due to the high demand for the stock.
NIC offered the public 16,155,200 shares held by the Government at sh45 through initial public offering.
Nation Media Group (NMG) also offered the 157,118,572 shares it holds at the Nairobi Stock Exchange (NSE) in Kenya to local investors.
NMG became the sixth company to cross-list on the USE from the NSE and the 13th overall to be quoted on the Kampala bourse.
Other cross-listed entities include Kenya Airways, East African Breweries, Kenya Commercial Bank, Equity Bank and Jubilee Holdings.
The estimated gross domestic product (GDP) growth for 2010 is 5.8%.
The GDP growth is projected at 6.4% in 2011.
Overall headline inflation rate was at 1.4% in November, while treasury bill interest rates for the 91 and 182 days stand at 6.75% and 8.39%.
In 2010 still, Joseph Kitamirike was appointed the new chief executive officer of the Uganda Securities Exchange.
Kitamirike the former chief executive officer of National Housing and Construction Company took over from Simon Rutega who stepped aside early this year after his tenure expired.
Rutega chose not to renew his contract.
Businessman Charles Mbire was also appointed the new chairman of the exchange.
THE Uganda Securities Exchange (USE) recorded the highest return by November with investors who bought shares in January pocketing an average of 60% in gains.
This means if one bought shares worth sh1,000 in January on a high value company like Stanbic Bank, they picked a profit of sh600 by November.
“It was because the prices fell really low in 2008 and they fell further in 2009. When prices normalise, it is a very strong recovery because of the fall,†said Joseph Kitamirike, the USE boss.
Stanbic Bank shares traded at sh160 in January, but were selling at sh265 by close of the day’s business on December 16.
Bank of Baroda traded at an average of sh300 per share in January, but this was up at sh500 by the end of the trading session last Thursday.
British American Tobacco Uganda, one of the biggest gainers this year, has also risen to sh1,740 per share, from just sh270 in January.
Kitamirke said the year 2010 had seen the stock market recover and investor confidence return as the exchange finally saw the back of the trickledown effects of the global financial crisis that saw many companies shed off value.
The USE returns have risen from -3% in 2009 to 63.1%, the highest in Africa by November 5, 2010. Kenya was second at 42.5%, while Tanzania, Zimbabwe and Malawi registered some of the lowest returns.
“It has put us in a position where we can think of accelerating listing. We expect at least three new listings next year,†said Kitamirike.
He said the 2011 listings will be substantial to change the market.
The USE all-share index (ALSI) also shot up to 74% between January and November, compared to a similar period in 2009.
The ALSI is a barometer that tracks the performance of the exchange. The 2010 performance shows the steady recovery of the bourse in the last 12 months.
This is in comparison to a similar period two years ago when trade volumes and value witnessed major declines due to the global debt meltdown.
Turnover shot up 51.6% to sh27.6b from January to November, compared to a similar period in 2009, when it stood at sh18.2b. Daily average turnover rose to 56.3% from sh132b to sh207b per day.
However, trading results in the third quarter of 2010 posted a decline in performance with the total turnover, dropping to sh3.9b from the previous quarter’s sh8.6b, while volumes recorded a drop of approximately 65% from 67.7 million shares in the second quarter to 23.1 million.
Number of deals stood at 1,053, down from 1,516. September registered the highest level of activity of sh1.7b, accounting for 44.2% of the quarter’s total turnover.
National Insurance Corporation (NIC) was listed on the exchange on March 21, becoming the 12th company to trade on the USE.
Its share price rose to sh60 from sh45 due to the high demand for the stock.
NIC offered the public 16,155,200 shares held by the Government at sh45 through initial public offering.
Nation Media Group (NMG) also offered the 157,118,572 shares it holds at the Nairobi Stock Exchange (NSE) in Kenya to local investors.
NMG became the sixth company to cross-list on the USE from the NSE and the 13th overall to be quoted on the Kampala bourse.
Other cross-listed entities include Kenya Airways, East African Breweries, Kenya Commercial Bank, Equity Bank and Jubilee Holdings.
The estimated gross domestic product (GDP) growth for 2010 is 5.8%.
The GDP growth is projected at 6.4% in 2011.
Overall headline inflation rate was at 1.4% in November, while treasury bill interest rates for the 91 and 182 days stand at 6.75% and 8.39%.
In 2010 still, Joseph Kitamirike was appointed the new chief executive officer of the Uganda Securities Exchange.
Kitamirike the former chief executive officer of National Housing and Construction Company took over from Simon Rutega who stepped aside early this year after his tenure expired.
Rutega chose not to renew his contract.
Businessman Charles Mbire was also appointed the new chairman of the exchange.