Uganda: Companies, Investors Hit Gold on USE Growth

Source from:  The Monitor (Kampala) 12 August 2008 08/12/2008

The status of Uganda Securities Exchange shows that all listed companies and investors have benefited from growth of the capital market although the market is hardly ten years old. Companies have increased their market capitalisation and maintained good performance on the stock exchange while investors have benefited from price increases, share splits, and right issues. Market capitalisation refers to the current stock price times number of outstanding shares. In an interview with Business Power, the Research and Market Development Manager USE, Ms Harriet Kiwanuka, said Uganda's capital market is steadily growing and that is in a good state to perform well in the long run because there is still a lot for both local and international investors willing to invest in the existing securities. She said there is still need for more companies to list on both the Main Investment market Segment (large corporate) and the Alternative Investment Market (small companies). "All Ugandan companies since listing have had their market capitalisation growing tremendously although some hard a bit of difficulties and took them some times to see increase in their market capitalisation," she said. Ms Kiwanuka said increase in companies' market capitalisation has been brought about by the increase in share prices, which has seen all equities doubling or tripling their price since the time of listing on USE. "The size and growth of a firm's market capitalisation is often one of the critical measurements of a public company's success or failure. However, market capitalisation may increase or decrease," she said. According to statistics from USE, East African Breweries Limited is the largest company with market capitalisation of Shs3,552 billion followed by Stanbic Bank Uganda Limited with market capitalisation of Shs1,228 billion, Kenya Airways Shs518 billion. Jubilee Holding limited Shs200 billion, Dfcu Shs188 billion, Bank of Baroda of Uganda Shs179 billion, New Vision Limited Shs128.0 billion, Uganda Clays Limited Shs102 billion and British American Tobacco Uganda Shs58 billion. While market capitalisation in Uganda's stock market is still much smaller than that of Nairobi Stock Exchange, industry experts are optimistic about the future of the market, reasoning that small capitalisation are much better investment in the long run because they have plenty of room to grow into large capitalisation. Enditem