Uganda Securities Exchange (USE) turnover has improved in the third quarter after falling by 30 per cent in the second quarter of 2009.

USE said on Monday that activity for quarter three of 2009 was stable and exhibited relative improvement in tandem with developments on the global financial scene.

The effects of global economic crisis forced offshore investors to withdraw their investments in Uganda's financial market both in the equities and in government securities, which led to a drastic decline in equity prices and the general performance of the stock exchange.

The event also led to panic and a slight loss of confidence in the financial market by the local investors in the capital market.

"Equities turnover rose by approximately 43 per cent to Shs4.9 billion from Shs3.4 billion recorded in the previous quarter. Volume also rose to a total of Shs30.2 million shares as opposed to Shs24.5 million of the previous quarter," the USE quarterly bulletin reads in part.

USE explained that deals recorded stood at 1,370 up from 1,308 while equity prices maintained relative stability throughout the quarter although at the end of the quarter, the price levels indicated a general decline in prices.

As it has been the case since its listing in 2007, Stanbic Bank continues to lead the way in terms of market share. During the period, Stanbic Bank Uganda accounted for 73.96 per cent of the total turnover, followed by Uganda Clays limited with 12.99 per cent.

Bank of Baroda and Equity Bank Limited posted 9.93 per cent and 1.57 per cent of the turnover while Dfcu, New Vision Limited and British American Tobacco Uganda realised 0.90 per cent, 0.45 per cent and 0.14 per cent respectively. Kenya Commercial Bank traded 0.05 per cent of the turnover as it is only a few months on the market.

The USE All Share Index during the period recorded a downward trend throughout the quarter, posting 829.74 in July and closing at 724.03 and 724.03 in September. The ALSI performance during the quarter declined due the continued drop in equity prices.

The current situation shows that wholesale funding markets have re-opened.

On the Fixed Income Securities Market Activity July -September 2009, USE said secondary markets government securities trading reported a turnover of Shs230 billion compared to a turnover of Shs87 billion registered in the second quarter.

Although the corporate bond board recorded no activity during the period, the segment saw Stanbic Bank listing a 7- year corporate on August 17. The Stanbic Bank bond becomes the sixth corporate bond raised through the USE after the PTA, EADB, UTL SCB and HFB bonds.