The Uganda Securities Exchange has rolled out an online trading window — Easy Portal — that offers investors opportunities for faster transactions at no fee to spur trading activity.
But a scarcity of equity listings and limited investor participation could work against the initiative.
Easy Portal directly helps investors to trade shares without hiring stockbrokers.
Stocks traded on the USE are charged a commission of 2.1 per cent that is shared between the stockbrokers, the bourse, the Capital Markets Authority and the Investor Compensation Fund, among other agencies.
To trade, investors will log in their Central Depository System account numbers, their national identification card numbers and view the prevailing stock prices before choosing trading options.
The trading window also contains an initial public offering (IPO) application, a critical aid for handling investor documents usually submitted during public equity offerings.Investor statements issued by this facility will be saved for a maximum of six years, the bourse said. However, investment costs tied to this trading portal could not be confirmed by press time.
Low IPO growth
IPO growth usually attracts more investors to stockmarkets and in turn, boosts trading activity as new investors seek to exploit fresh opportunities available at the bourse.
The low IPO growth at the USE can be traced back to 2012. While DFCU Ltd and New Vision Ltd were listed in and also recorded oversubscription of about 50 per cent, Stanbic Bank Uganda was listed in 2007 following a successful IPO that was oversubscribed three times, according to industry data.
Nevertheless, the bourse is exploring IPO opportunities among some government-owned financial institutions that possess reasonable growth forecasts.
However, sluggish growth evidenced in IPO subscriptions in recent times could impact investor uptake on the Easy Portal window, observers say.