25 December 2012

Uganda: Power Distributer Boosts Trading

Kampala — On November 30, 2012 the Uganda Securities Exchange (USE) received a major boost as UMEME limited, the monopoly power distributer in Uganda, officially listed on the bourse.

On listing day, the counter traded over 647,900 shares at a share price Ush275 to realize Ush178m in turnover. The lowest and highest prices on the opening day were Ush270 and Ush295 respectively.

The price increased over the next two trading sessions reaching a high of UGX 300. The session that followed witnessed the highest volumes traded (15 million shares) at Ush275 per share.

On average, daily trading volumes have been gradually falling since a high of 15M shares traded on December 4, 2012.

The bulk of the trades have been made by institutional investors at the Umeme counter. During most of December the Umeme counter dominated turnover at the USE, generating a total of UGX 12.45 Bn ($4.697m) over 15 trading days. The power distributor has taken over dominance at the USE from Stanbic Bank that formerly dictated proceedings at the bourse.Umeme also cross-listed in Nairobi on December 14, 2012 making it the first Ugandan listed company to join the Nairobi Securities Exchange The share price has averaged Ush275, with a high of Ush300 and low of Ush275 per share. On the whole since listing, supply has consistently outpaced demand while prices remain stable suggesting that it's a buyer's counter at the moment.

Last week however, there was minimal activity at the bourse as the festive season neared.

Arthur Nsiko, a stock broker with African Alliance told the East African Business Week that trading at bourse had slowed down mainly because a number of investors had travelled and others are not thinking of business.

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