- Several institutional investors from the Uganda Securities Exchange (USE) have been scared off.
- This is despite the impressive half-year results reported by listed companies since last month.
- MTN Uganda Ltd.'s total sales income for the first half of 2023 was Ush1.27 trillion ($338.7 million).
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.