12 January 2013

Uganda: Umeme Dominating Trades, Stanbic Demand Up

UTILITY company Umeme has continued to attract a lot of activity at the sh275 per share price since listing at the end of 2012.

A total of 225,320 shares had been purchased by the close of business on Tuesday by institutional investors contributing sh62m to the total turnover for the day.

Arthur Nsiko, a securities trader at the African Alliance Uganda (AAU), notes that activity on the share markets has been rather low at the start of the year, with an average sh50m being recorded over the past week.

"Investors are slowly returning from the festive season and activity is slowly picking up. There has been healthy demand on the Umeme counter over the past month, largely from small institutions," he explained.

"The level of demand from Kenyan investors on the Umeme counter has dropped since the cross listing as it takes less time and exchange risks are eliminated when they purchase locally," he added.

There were 1.3 million shares in the outstanding offers basket on the Umeme counter against 74,680 outstanding bids at the sh275 current share price.

Stanbic Bank had the second highest activity, selling 520,167 shares for sh10.4m turnover. Traders say the impending release of a quarterly dividend is likely to spur the share price to higher levels.

Nsiko points out that there is a deadlock on the Stanbic counter as demand at the sh20 per share level has created 3.7 million outstanding bids against 3.1 million outstanding offers at sh25 per share.

"We are reaching the end of the first quarter of the year and there is expectation of a dividend announcement by the bank. Current shareholders are keen on holding for the dividend or selling at sh25," he explained.

Baroda continued to record activity, selling 6,910 shares for sh1.7m at the sh250 per share level.

There is buildup of supply on the New Vision, Uganda Clays, and National Insurance counters, with no trades at current demand and prices.

A drop in activity was recorded with the All-share Index falling to sh1259.8, from sh1263.48, while the local share index stayed at 193.9, same as last week.

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