Listed companies take hit from Covid-19

Listed companies take hit from Covid-19

Stock brokers during a trading session. Fixed income markets are likely to remain the investment of choice for some time to come according to experts. Courtesy photo Uganda Securities Exchange (USE) is where publicly listed companies list a portion of their shares for the general public to invest their money by buying shares.

Equities are stocks or shares in a company. If you buy stocks, you’re buying equities. You may also get “equity” when you join a new company as an employee.

That means you are a partial owner or can be, of shares in your company. Since equities do not pay a fixed interest rate, they do not offer guaranteed income. In other words, with equities come with risk.

Uganda Securities Exchange has four quarters of trading activities on the stock exchange each financial year.
During the first quarter of 2020 (January to March 2020), research analyst at Created Capital, Mr Oscar Paul Emasu says trading turnover on the USE in Q1 2020 stood at Shs21.51 billion with a volume of 273.58 million shares.

“The market improved significantly versus Q1 2019, comparable turnover is up 143 per cent from Shs8.84 billion in Q1 2019 to Shs21.51 billion in Q1 2020,” he said.

Explaining what contributed to USE’s better performance in first quarter compared to last year, Mr Oscar says: “The trend of the improved performance in Q1 2020 started in the last quarter of 2019 where the Electricity Regulatory Authority (ERA) approved favourable performance parameters for Umeme, there was also significant liquidity on the Stanbic counter which also drove activity.”

Mr Emasu adds: “Indications of strong FY2019 financial results for several listed companies including British American Tobacco, Bank of Baroda, dfcu limited, Stanbic Uganda and Umeme boosted optimism in the period as investors positioned for attractive valuations.”

During the quarter, all sorts of investors were in the stock market comprising of retail individuals, local funds, African funds and international funds.

Mr Emasu says in quarter one, Umeme was the most preferred in the period, trading 64.07 per cent of turnover, Stanbic Uganda Holdings with 24.31 per cent and dfcu with 11.19 per cent.

The stock market was hit by Covid-19 towards the end of quarter one as most activities internally and externally affected corporate actions.
Following the outbreak of Covid-19, businesses and the general public have been encouraged to adopt a number of social distancing measures which restrict public gatherings.Consequently, the Uganda Securities Exchange also advised listed […]

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