Stock market boost as MTN listing takes shape

 Uganda Securities Exchange CEO says number of investors could triple

Kampala, Uganda | JULIUS BUSINGE | Executives at the Uganda Securities Exchange are optimistic about increased activity and shareholder numbers at the bourse as MTN Uganda’s listing takes shape.

Paul Bwiso, chief executive officer said on the sidelines of the World Investor Week (WIW 2021) event organised by the USE in Kampala on Oct. 08 that, the number of investors is expected to more than triple from 42,000 (both retail and institutional) to 150,000 once listing of MTN Uganda is concluded.

He said the number of Ugandans making inquiries at the exchange, brokerage firms are on the rise. Account opening numbers too have been on an increase in the recent past, according to Bwiso.

The increased numbers of investors on the exchange, coupled with new listings and recovery of the economy would boost activities on the bourse and create other opportunities.

Last month, USE management launched a digital Securities Central Depository (SCD) account opening platform in partnership with MTN Mobile Money in a bid to further democratize Uganda’s stock market.

The innovation, executives said, is the first of its kind in Uganda and it is envisaged to simplify the process of opening an SCD account, which is a requirement for individual investors to participate in the securities market.

Bwiso, said the new digital SCD account opening platform will bolster participation of the everyday Ugandan in the country’s stock market as more people will be able to open their SCD accounts remotely and subsequently be able to invest in any of the companies and debt instruments listed on the USE.

Listed entities commit

Andrew Mashanda, CEO at Stanbic Uganda Holdings Limited (SUHL), one of the sponsors of this year’s investor week event, said they will continue to embrace partnerships that help raise financial literacy across the country as well as drive faster uptake of financial products.

“For us to grow, we have to promote financial literacy in Uganda and help ensure increased market development in line with our purpose,” he said.

The growth of the Uganda Securities Exchange remains very slow as shareholders hold onto their stocks for the long term.

Stanbic Bank was the first bank to be listed on the USE more than 15 years ago. It is now part of the holding company, SUHL.

The USE management had invited Mashanda to take part in a panel discussion and share the SUHL perspective on how technology can promote financial literacy and inclusion in Uganda.

Special focus was on SUHL’s experience in enhancing shareholder engagement and education and how this translates into increased shareholder value.

Mashanda said, the bank has been very successful for many years and hopes to create more value now that they have a holding company.

“This will allow us to tap into new pools of revenue and diversify shareholder value. We are also promoting financial inclusion through increased digitization. With such initiatives as Flexipay and mobile banking solutions, it is easier for customers to bank and interact with us more conveniently.”

He added that the idea of forming a holding company was to ensure that those that are underserved get the service.

“We want to be relevant to the lives of all Ugandans,” Mashanda said, “we do that by chasing customers that are outside the fence.”

Japheth Kato, the former CEO of the Capital Markets Authority and current chairman board of directors at SUHL said, one of their holding companies, Stanbic Bank Uganda, is involved in reaching out to as many Ugandans as possible through electronic, agent banking and other means.

Going forward, Bwiso said, they will continue to push initiatives to drive increased market activity and access to long term financing.

This, he said, will be achieved through enhancing the USE Easy Portal to facilitate convenient investing, enhancing their product offering and using digital tools to raise awareness about available investment opportunities on the market.  The USE has a total of 15 listed companies both local and cross-lists. Total market capitalization is Shs20.36trillion, local market capitalization is Shs3.89trillion according to data from the bourse’s Head of Trading Andrew Mwima. MTN listing is expected to boost market capitalisation by a high figure in December.

****