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Despite the impressive half-year results reported by listed companies since last month, persistent economic concerns, poor returns from listed shares, the end of the dividend hunting season, and relatively high-interest rates on government securities have scared away several institutional investors from the Uganda Securities Exchange (USE).
According to current USE trade statistics, the average stock market turnover in August was less than Ush60 million ($16,001) in each trading session, and daily trading volumes were fewer than 500,000 shares on average. This is an indication of minimal institutional investor activity.
“Several large pension funds have exited their long-term investment positions in the equities markets because of diminished returns. Most of the equities portfolios have generated returns of around 3-4 percent in Uganda. As a result, large investors have migrated to fixed-income assets, real estate, and private equity investments that offer better returns in comparison,” Allan Lwetabe, director of investments at the Deposit Protection Fund of Uganda, elaborated.
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According to the most recent financial figures, MTN Uganda Ltd.'s total sales income for the first half of 2023 was Ush1.27 trillion ($338.7 million), up from Ush1.09 trillion ($290.7 million) in 2022. The dividend for the first half of the year increased by 19% to Ush5.6 ($0.0015) per share, for a total distribution of Ush125.4 billion ($33 million).
“Profit after tax registered by Stanbic Holdings Uganda Ltd rose from Ush162 billion ($43 million) in June 2022 to Ush200 billion ($53 million) in June 2023 while its total income increased to Ush550.5 billion ($146.8 million) from Ush455 billion ($121 million). Umeme Ltd’s total revenues grew by 19.9 percent to Ush1.076 trillion ($286.9 million) while DFCU Ltd’s income rose from Ush187 billion ($49.8 million) in June 2022 to Ush198.5 billion ($52.9 million) in June 2023, while profit after tax increased from Ush18.7 billion ($4.98 million) to Ush29.3 billion ($7.8 million) during the same period under review,” as seen in a news report by the East African, an East African news publication.
The energy distributor's amortization expenses, however, increased due to a one-time impairment charge paid by the firm before the 20-year concession agreement's expiration in March 2025, from Ush79 billion ($21 million) in June 2022 to Ush210 billion ($56 million) in June 2023. A half-year dividend of Ush24 ($0.006) per share was announced by the firm.
At the end of June 2023, British American Tobacco Uganda's profit after tax decreased by 2.07% to Ush3.79 billion ($1 million). At the end of June, Uganda Clays Ltd. reported a loss of Ush690 million ($184,006).