A Stanbic Bank stand at an exhibition in Kampala. The high liquidity on the bank’s stock saw its price rise by 15.2 percent to Ush23 ($0.0065) at the beginning of 2021. PHOTO| FILE Stanbic Bank Uganda maintained its position as the most-traded stock on the Uganda Securities Exchange in July, amid liquidity drought on the bourse.
While the USE has 17 listed companies — seven domestic and nine cross-listed — 14 counters remained dormant as investors shifted capital into short-term asset classes. As a result, the liquidity woes pulled down the USE traded value by 31 percent month-on-month to Ush2.4 billion ($679,738) in July, from Ush3.5 billion ($991,554) in June.
The USE trading highlights, however, show the market turnover for July is on a significant recovery trajectory, driven by Stanbic Bank, Umeme and Uganda Clays stocks, compared with Ush271.7 million ($76,963) registered in July 2020.
“Stanbic Uganda Holdings Ltd dominated activity, taking up 90.9 per cent of total market turnover — Ush2.17 billion ($615,065.18),” said Salama Nakiboneka, USE business development manager.
The high liquidity on the Stanbic counter saw its share price increase by 15.2 per cent to Ush23 ($0.0065) at the beginning of this year. The current share price of Stanbic Bank Uganda is Ush26.50 ($0.0076). Experts rank the bank stock fifth on the USE in terms of year-to-date performance.
Meanwhile, the sustained increase in investor appetite for government paper, however, paints a bleak outlook for the USE equity market as the Covid-19 pandemic ravages economies. Due to forecast stability of the shilling, USE also projects a sustained demand for fixed income securities resulting in a slow recovery of private sector credit amid the current uncertainty resulting from effects of the second wave of the pandemic and its impact to the economy.
USE said there was an increment in the short end of the curve as investors focused on the medium portion of the yield curve.
“The 91-Day and 364-Day were quoted at 7.35 percent and 10.3 percent at the end of July from seven percent and 10.1 percent at the end of June respectively,” said Nakiboneka. “Overall, yields remain below the six months average showing the extent of decline observed especially in the second quarter of the year.”
The other two active counters are electricity distribution company Umeme Ltd, which generated five percent turnover or Ush120 million ($34,012), and Uganda Clays Ltd the country’s largest maker of tiles and bricks, which generated Ush72 million ($20,409), […]