Uganda markets outlook bullish as shilling steadies

Uganda’s equities and fixed incomes markets have shown resilience despite a slowdown in market activity as investors adopt a cautious 'wait and see' approach. Pamela Akidi, the Retail Sales Manager, Global Markets at Stanbic Uganda, provided insightful analysis and trends shaping the Ugandan markets. The equities market has seen significant interest in three main counters - Umeme, Stanbic, and the Telecoms, MTN and Airtel. Umeme has maintained stability, with plans for a payout to existing shareholders by the government approaching soon. Stanbic Bank has seen steady trading as it nears its reporting period. MTN, on the other hand, has experienced a decrease in price due to reduced participation from investors, particularly offshore investors. Airtel has witnessed a high level of interest, with scarcity noted for its stock. As Q1 progresses, these counters are expected to see activity around reporting periods and dividend payments. The fixed income market saw an uptick in January, with yields reaching as high as 17 percent. This attracted both offshore and local participants to purchase treasury bonds. Inflation below the target of 5 percent coupled with attractive yields contributed to an active market. As February progressed into March, there was a slight reduction in yields, signaling a potential further decrease in the near future. Moving to the forex market, the Ugandan shilling has remained stable and resilient. Factors such as increased coffee flow, remittances, NGO flows, and demand from various sectors have kept the shilling attractive to buyers of dollars. The shilling's stability is expected to continue, although traditionally there is a depreciation trend in Q1. The new Central Bank governor's appointment has brought attention to maintaining a strong shilling, sustaining policies, accumulating reserves, and supporting government economic growth. With the new governor's familiarity with the central bank's operations, expectations are high for continued success and stability in the market. In summary, Uganda's markets are showing stability and resilience amidst global headwinds, with a positive outlook for the future.