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2013, best year ever for Uganda Securities Exchange, here is why

At the Uganda Securities Exchange (USE), it is business as usual. After the first five minutes of trading, there is a long lag where brokers read newspapers, discuss football, politics and once in a while a trade will come. 2013 wasn’t any different. In terms of numbers it was. At the end of 2013, the stock market turnover was Ugx197.7bn a rise of more than 500percent from Ugx30.5bn in 2012. A big leap indeed. 2013 was arguably, the record breaking year for the USE. Trouble is, Joseph Kitamirke the CEO, who left mid-2013 has not been replaced. Many have asked, what was different in 2013?

Dfcu Group was the difference. The bank accounted for more 58percent [Ugx112.95bn] of the entire turnover at the stock exchange. If compared to 2012, this counter only had Shs1bn in trading turnover. Umeme came in second with turnover of Ugx44bn and Ugx30.7bn for Stanbic Bank in third. All these were record breaking figures for these stocks.

Dfcu is Uganda’s sixth largest bank in terms of assets – Ushs981.1 and customer deposits – Ushs591bn. At the end of 2012, it was Uganda’s 7th most profitable bank despite a 5.4percent fall in profits to Ushs29.8bn offering dividends of Ushs37.1per share to shareholders. In 2013, Rabobank from the Netherlands – bought a 27.54percent stake in Dfcu. Also, NORFUND increased its stake in the Dfcu to 27.54percent in the bank after buying an additional 17.54% in Dfcu. The transaction was valued at Ugx111.9bn, accounting for 99percent of the entire turnover on the Dfcu counter.

“The more we do this, the more ready we will be when other transactions come on board,” then CEO, Joseph Kitamirike said. The USE has never handled a transaction of this magnitude and for two brokerage firms, African Alliance and CfC Stanbic Securities- now SBG Securties – , it was a handsome payday for them. Such transactions are not common for listed equities in Uganda, so it is the number one reason why the stock market performed “well” in 2013.

Umeme also completed its first full year on the USE in December 2013 and had a turnover of Ugx44bn, which is 39percent of the total turnover of the USE. Umeme has been an active counter since the company listed in November 2012. Institutional investors were particularly interested in this counter, arguing that it had been largely undervalued at the time it listed. Its shares were also available to trade for those willing to exit and enter. It also recorded the highest price appreciation of about 35percent.

Stanbic Bank turnover was also up by 137percent to Ugx30.7bn in 2013. This leap was also due to increased activity on this counter. Stanbic Bank is Uganda’s largest bank by assets, customer lending and deposits.  Again, the demand on this counter was driven by interest from pension and mutual funds that were reviewing their investment strategy. This as the banking sector is expected to have recovered in 2013, after the Non-Performing Loans (NPLs’] that dogged the sector. Analysts were bullish then, with one of them telling this columnist in 2013 that “……we expect better growth in the second half and in 2014 in terms of interest income as credit growth improves and recoveries on non-performing loans while noninterest revenue will grow as deposits continue to improve.”


The USE was however dealt a significant blow when the CEO, Joseph Kitamirike was not given a new offer by the governing council. The performance was undoubtedly the best in the history of the exchange, but once again two counters, Stanbic and Umeme present that organic growth. 

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