Stanbic Bank Most Buoyant on the Stock Market

4349 Views Kampala, Uganda

In short
On Thursday, the Stanbic Bank counter registered trading of 9.3 million shares at 25 shillings each while the other counters barely registered any trading. This is the scenario on any typical day.

Trading on the Uganda Securities Exchange (USE) remains dull for most of the listed companies but not Stanbic Bank.
 
Uganda’s biggest bank by capital base and assets continues to register impressive performance on the bourse while most of the 17 companies barely see any movements.
 
On Thursday, for example, the Stanbic Bank counter registered trading of 9.3 million shares at 25 shillings each while the other counters barely registered any trading. This is the scenario on any typical day.
 
Sam Manana, a broker with Crane Financial Services, explains that the Stanbic Bank counter is active because it is a strong, international bank with a solid base. This, explained Manana, creates confidence in investors who feel that by investing in the bank they would have greater security for their shares.
 
Manana said investors look for liquidity of the companies, meaning the more a company’s shares are easily tradable, the safer it is to invest in it. This means that a shareholder can sell or buy shares without any hindrance.
 
Another reason why Stanbic Bank shares are much sought after is because they are cheap. At between 20 and 25 shillings, one can buy as many shares as possible for a relatively smaller amount of money compared to buying a few shares at a higher price.
 
According to Manana, that explains why Uganda Clays shares are also quite attractive.
 
Manana explained that one other reason why Stanbic Bank is doing well is that it regularly declares dividends in which the shareholders get capital gains. He said such an action cements investors’ confidence in the company.
 
Manana said the Uganda stock market is also dull because most people do not know how it works and benefits them. He said unlike in Kenya where even the ordinary man is aware of the stock market’s importance, in Uganda there is still a need to sensitize the people.
 
The USE is relatively new, just over 15 years old, compared to the Nairobi Stock Exchange which was created in 1954, nearly 60 years ago.
 
On the Ugandan bourse there are eight Ugandan companies with the latest being Umeme. Kenyan companies cross-listed from Nairobi Stock Exchange are eight.
 
Manana said the Kenyan companies perform relatively better than their Ugandan counterparts because they are stronger and have bases in Kenya which is Eastern Africa’s economic power house.
 
In an earlier interview, Arthur Nsiko from brokerage firm African Alliance said the stock market’s weakness is also attributed to a more attractive treasury bills and bonds market at Bank of Uganda. The bills and bonds fetch higher interest and are not prone to losses.

 

About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."