NSE stocks cross-listed in Uganda post huge price fall

Although Uganda Securities Exchange (USE) realised an equity turnover of USh187.3 billion (KSh5.6 billion), from a volume of 890 million shares in 2015, cross-listed stocks from the Nairobi Securities Exchange recorded huge drops in their share prices.

Of the 16 listed companies on USE, eight are locally listed while the rest are cross-listed companies mainly from Kenya.

Trade manager USE Andrew Mwima explained that the negative performance of the all share Index was greatly attributed to the cross-listed stocks from the Nairobi Securities Exchange that saw most of them record huge drops in their share prices.

The stock price of KCB dropped by 24.14 per cent, Equity Bank dropped by 15.2 per cent, Centum 17.62 per cent, NMG dropped by 21.52 per cent while East African Breweries dropped by 4.56 per cent.

“Most of these stocks contribute heavily to the market capitalisation of the Uganda Securities Exchange which declined to 24.1 trillion at the end of the year from 26 trillion at the beginning of the year,” he said.

The performance in the stock market is determined by how the All Share Index behaves.

In the stock market language All Share Index is a series of numbers which shows the changing average value of the share prices of all companies on a stock exchange, and which is used as a measure of how well a market is performing.

Speaking on the performance of USE Index Performance, Mwima said: “The All share index opened at 1,905.85 at the beginning of the year, it touched a high of 2,076.39 and started a descent that saw it drop to 1,995.63 in June, 1,822.2 in October and closing at 1,763.75 on 31st December an overall drop of 7.46 per cent.”

Regarding the Local Share Index, he said it opened at 318.63 at the beginning of the year, rose steadily to 329.19 in March, 370.73 in October before closing at 412.07 in December registering an overall gain of 29.3 per cent.

“This was supported by the gains in share prices of most local companies most notably; UMEME, DFCU, BATU and Bank of Baroda.

“This implies that an investor who had invested in the local stocks registered an average return on investment of 29.3 per cent on capital gains alone without taking dividends into account,” he said.

Mwima added: “Both Indexes; the All share and Local share index performed relatively well compared to the world stock market bench marks most notably the Morgan Stanley Capital Index (MSCI) series that track performances of stock markets world over.”