Inside Uganda's market movements

Uganda's equity market has experienced a significant surge in turnover, with trades in Stanbic Bank and MTN Uganda leading the way. The market saw turnover jump from UGX 35 million to nearly UGX 297 million, closing Friday. This increase has raised questions about market depth and sustainability, particularly in terms of retail participation. Simon Mwebaze, the Managing Director at Cornerstone Asset Managers, joined CNBC Africa to provide insights into the current market dynamics. Mwebaze highlighted the recent momentum in the market, attributing it to strong performances by key players such as MTN and Stanbic Bank. MTN's robust results, including impressive subscriber base growth and a positive dividend outlook, have generated positive sentiment among investors. Additionally, the anticipation surrounding the potential spin-off of MTN's fintech arm has further fueled market activity. Stanbic Bank's strong half-year performance and the appointment of a new Managing Director have also contributed to positive market sentiment. On the other hand, the impending exit of Umeme from the market following government approval of a significant payout adds an element of uncertainty to the market landscape. Mwebaze emphasized that while institutional investors such as NSSF and offshore entities currently dominate the market, efforts are being made to increase retail participation. Initiatives like the easy portal and partnerships with telecom companies aim to facilitate retail investment. However, there is still a need to address barriers that hinder retail growth and encourage greater participation from local investors. In terms of foreign versus domestic investment, Mwebaze highlighted a shift towards local institutional participation and emphasized the importance of strengthening domestic investor confidence. He pointed to upcoming corporate bond issuances and the potential spin-off of MTN as catalysts for increased local interest. As earnings season approaches, expectations are high for solid performances from banks like DFCU, Bank of Baroda, and Standard Bank. The anticipation of strong dividends in such high-yielding stocks is expected to attract more retail investors to the market, further shaping market movements in the weeks ahead.