Stocks of power distributor Umeme are the most sought after of the 16 companies listed on the Uganda Securities Exchange (USE). This is followed by Stanbic Bank Uganda.
According to the Chief executive of USE, Paul Bwiso, Umeme’s shares are most traded because unlike other companies literally all its shares are tradable. Stanbic Bank follows with 20 percent of its shares tradable.
The other listed companies have inelastic shares most of which, are held by institutions with a long-term view. Bwiso says as a result Umeme and Stanbic accounted for 93 percent of traded shares in 2016, with the 14 other companies contributing just seven percent.
Other Ugandan listed companies are New Vision, Bank of Baroda, Dfcu Bank, National Insurance Company, British American Tobacco Uganda, and Uganda Clays.
Umeme distributes 97 percent of electricity in Uganda and has a concession running up to 2025. Shares in Umeme are held by National Social Security Fund at 23 percent, with the rest held by investment funds Investec Funds, Kimberlite Frontier Africa, SCB Mauritius.
Others are The Africa Emerging Markets Limited, International Finance Corporation and Duet Funds, Utilico Emerging Markets Limited, SBSA ITF BCI Africa and other individual shareholders.
On the huge loss of value of the stock market, Bwiso attributed it mainly to impact of the capping of interest rates in Kenya which affected shares of mainly banks like KCB and Equity as well as other cross-listed companies.
Early this year, the stock market’s capitalization slumped to 20.3 trillion shillings from 24.5 trillion shillings in early 2016. According to Bwiso, the attractiveness of the government papers – treasury bonds and treasury bills – affects stocks because both tend to attract the same investors.
Cross-listed companies from the Nairobi Stock Exchange are Kenya Airways, East African Breweries, Jubilee Holdings, Equity Bank, Nation Media Group, Centum Investment Company, Kenya Commercial Bank and Uchumi.
Kenyan President Uhuru Kenyatta in August 2016 signed a law capping interest rates, a thing Uganda is not keen on. This immediately had knock-on impact sending jitters through the stock exchange leading to drop in value of many companies.