Independent Financial Analyst (PHOTO/Courtesy).
KAMPALA – As a young boy, my grandmother (may her memory be for a blessing) told me that if I wanted to be the brightest in my class, I was going to have to eat the head of a chicken. Which I did.
So, in my lifetime I have put down my fair share of chicken heads [sic] to sharpen my intellect enough to know that; Uganda Securities Exchange (USE) is treating us (Ugandans) like stepchildren with their unconcern in the way they carry out their tasks.
Charged with the duty of running the Ugandan stock market, USE was set up in 1997 and licensed to operate as a securities exchange in 1998. In 2017, it demutualised: That is, it transitioned from a not-for-profit organisation to an organisation that can make profits, and is limited by shares.
And as a matter of course, “The Exchange is governed by a Board of Directors whose membership includes licensed broker/dealer firms, investment advisors, and a representative of issuers,” the organisation’s website spells out. The exchange has a total market capitalization of 23.1 trillion shillings, approximately $6.5 billion.
It (USE) doesn’t clarify how many companies are listed and this ambiguity is carried over to its website.
Inasmuch as the organisation has been entrusted with an enormous amount of responsibility, it has performed depressingly in its execution of its tasks.
After I ferreted out USE’s website, I made the following observations:
To start with, the exchange’s website looks like it is powered by a pair of ‘small tiger head batteries’. The colouring, lighting and the lull adverts (what they lack in lustre, they compensate for in dullness) are not befitting of a national exchange.
Secondly, even though the bourse’s equity listings are 18 (including the all share and local company indexes which are not equities), the market snapshot counts 16 listings. Under equities, the ‘new kid on the block’— MTN is excluded but puzzlingly appears under the market snapshot section. I guess you can’t be in two places at the same time!
Therefore, any prospective investor would be left wondering if there are 16, or 18 companies to buy into?
Besides the introductory information on companies, no current, timely news on the listed parties is provided.
The information that a prospective investor would need to help them make investment decisions is not provided. Information like: earnings per share, price earnings ratios and financials that would highlight revenues, net incomes, cash at hand is missing.
Astoundingly, a lot of information that is quoted to be available is nonexistent. For instance, the historical data on Bank of Baroda indicates that it’s showing the share price to the present day—Jan 19 2022, but the graph only goes as far Jan 17, leaving two day’s information lost in USE’s ‘metaverse’. For this, USE qualifies to be a merchant of snake oil.
After 25 years in existence, in a predominantly agriculture economy, the body has failed to integrate agriculture into its operations. Worse still, it has failed to form a partnership with Uganda Commodities Exchange. This would progress the exchange into becoming a clearing house for derivatives—futures, forwards.
In sharp contrast, the next door neighbour—Kenya signed a Memorandum of Understanding with the London Stock Exchange Group to dually list their National Oil Company on the London exchange. That is, in addition to listing a property bond on the London bourse in January 2020. How difficult then can it be for USE to make consequential partnerships within the borders of Uganda, one may wonder?
Intriguingly, real estate Uganda’s cash cow isn’t represented in any way, shape or form. Tourism also doesn’t make an appearance.
With the said chinks in their operations, it is imperative that USE steps up to the plate by making these adjustments:
First things first, they need to build a new website. One that is vibrant, graphic; elaborate and eye catching complete with updated information, news; swirling commercials, and applicable back dated graphs.
And then go on to develop a broad-gauged strategy and wheel in — Real estate, Tourism and Agriculture therein attracting the key players in these sectors by designing financial instruments that suit them.
The government could step in and rally actors from different sectors to start a parallel stock exchange. One that is more inclusive, robust and up-to-the minute.
This was done in India 30 years ago when a new-fashioned exchange was founded (National Stock Exchange) to compliment the old Bombay Stock Exchange.
It goes without saying that USE needs to rebrand and embark on a vigorous marketing drive to make it relevant.
The exchange is overseen by Charles Mbiire and has direct access to Patrick Bitature (who’s chairman to Umeme a listed company). Both are certified Forbes candidates and Patrick Bitature ‘talks a good game’ in all matters high-finance. Together, they can work something out for the betterment of USE because they lend their names to the body as heavy hitters and mustn’t been seen to associate with sloppiness.
Ultimately, the CEO— Paul Bwiso needs to cut back on his complacency and oil the wheels of diligence. First by ramping up his media presence (he has only tweeted once in nine years) and then usher USE into a media aware dawn.
The last post on USE’s social media— Twitter, as of Jan 19 2022, was on New year’s eve. A lot has occurred within that period that they haven’t relayed. This has created an information gap.
More importantly the public and private sectors have got to educate themselves first about the essentiality of a stock market; and then devise means to entice the masses to buy into the concept.
Because the direction a country’s stock market takes, is the same the economy moves in with little deviation.
Mark Kidamba is an Independent Financial, Investment Analyst.
Twitter: m_kidamba
