Volatility Hits Uganda Securities Exchange Trading Activity in 2024

AFRICAN STOCKS AND FINANCEDecember 23, 2024 at 12:25 PM UTC

TLDR

The Uganda Securities Exchange (USE) experienced volatile trading patterns in 2024
Between November 4-8, trading turnover surged to Ush8.91 billion ($2.4 million) from Ush202.99 million ($55,387) the previous week
The volatility is partly attributed to interim dividend payments, which attract investors seeking quick portfolio gains

The Uganda Securities Exchange (USE) experienced volatile trading patterns in 2024, especially in the second half, with significant fluctuations in weekly turnover and trading volumes, according to Crested Capital.

Between November 4-8, trading turnover surged to Ush8.91 billion ($2.4 million) from Ush202.99 million ($55,387) the previous week, driven by MTN Uganda, which accounted for 93% of the value. However, turnover dropped to Ush2.93 billion ($799,462) the following week and plummeted further to Ush71.66 million ($19,553) by November 18-22.

The volatility is partly attributed to interim dividend payments, which attract investors seeking quick portfolio gains. However, activity often slows after investors secure additional shares, impacting trading volumes and stockbrokers' commission incomes.

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Key Takeaways

Stockbrokers have leveraged dividend-driven activity to market opportunities, but executing large buy orders—sometimes 100 million shares—remains challenging, requiring weeks of coordination among brokers, the USE, and fund managers. With profitability as a key investment criterion, institutional players like Sanlam Investments Uganda focus on blue-chip stocks, intensifying demand swings. While interim dividends boost short-term activity, sustained market stability requires strategies to enhance liquidity and broaden investor participation.

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Uganda

Uganda Securities Exchange

USE

Crested Capital

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