Uganda: Q3 Securities Trading Declines On Use

Source from:  The Monitor (Kampala) 31 October 2007 11/01/2007

INDIVIDUAL investors suffered low capital gain in the third quarter of 2007 on the stock exchange following a fall in equity prices. Individual investors in the capital market usually cash in more funds when they off load their shares in the market at higher prices, but this time round the third quarter has not been good for them meaning that they have either made losses or capital gain was relatively low. "Activity in the third quarter registered a slight decline in performance, which was mainly facilitated by the drop in equity prices across the board," reads the Uganda Security Exchange Bulletin released on Monday. The USE Bulletin says quarterly volume also dropped by 25.5 per cent to 84. 2 million shares, while total turnover also went down by 26.4 per cent to Shs13.1 billion. On daily trading activity, the bulletin reveals that the average daily turnover stood at approximately Shs326.7 million and approximately 83 trades were recorded on a daily average. The total deals on the bourse stood at 3,319 deals. USE officials said the third quarter experiences a dry up period in the market in the sense that there were many shares of some companies being offloaded in the market by individual investors and is the reason why there was a drop in equity prices because supply was more than the demand. On the other hand investor were also full of fears of what companies half year results would be and such fears also caused price fluctuation because the investosr were not sure whether the company they are investing is making profits or losses, the officials and cross section of brokers, said. During the period the number of shares traded also dropped from more than 153,183,000 shares to about 113,162,000 representing a drop of more than 400,211,000 while the total number of deals recorded rose to 3,865 as opposed to 3,629 deal in the previous session. The USE says despite the drop in performance, the Stanbic Bank counter continued to dominate trading on the equity board. It posted the highest returns with 82.97 per cent of the turnover and approximately 93.05 per cent of the volumes. British American Tobacco Uganda recorded 12.06 per cent of the turnover and 5.60 per cent of the volume. The period under review saw the USE All Shares Index register oscillations with rates rising from an opening 8,08.57 at the beginning of the quarter to 837.15 at the end of July. The report says the trend continued to rise with the rate fluctuating at between 836.57 and 964.34 levels of in August and mid September. This volatility decreased at the end the quarter with the ALSI sliding gradually to close at 927.15. On the on Fixed Income Securities market activity for the quarter, the report shows that the government bonds saw a total of more than Shs137.077 billion being traded. There are 21 government bonds listed on USE. The Standard Chartered Bank bond dominated the activity with Shs20 million. Enditem