Market Update 6th February 2019

USE ALSI Close: 1,833.82 Previous: 1,807.44 (UP:12.29% YTD) - USD/UGX: 3,669.08 Previous: 3,674.58 (UP: 1.02% YTD)

USE ALSI* Key Statistics: Close 1,833.82 Market Synopsis: 1D* % Change 1.46 MTD* % Change 3.86 Market activity sharply dropped to Ugx4.41Mn ($1,203) below yesterday’s Ugx51.37Mn YTD* % Change 12.29 ($13,980). Activity was spread across five counters. traded shares worth Ugx3.78Mn 52 Week Range 1,590.22–2,269.50 from 12,600 shares traded at Ugx300 each. Stanbic Bank and Bank of Baroda Uganda Volume 28,444 dealt Ug x0.31Mn each as their share prices closed at Ugx28.9 and 134.35 respectively. NIC Turnover (ugx) 4.41Mn($1,203) Holdings and Ltd made a combined Ugx4,872 in turnover. The ALSI gained PE 6.86 1.46% to 1,833.82 while Crested’s C9 shed a marginal 0.03% to 139.15 at the close of EPS 60.85 trading. Dividend Yield 2.1% Headlines: Market Cap (Ugx) 23,247.99Bn ($6,347.57Mn) New capital requirements worry insurers: Insurance players have expressed concerns over new capital requirements in the new Risk Based Supervision model. Speaking during a USE ALSI*- USE All Share Index, 1D*- One Day, MTD*- Month to Date, YTD*- Year to Date Source: Uganda Securities Exchange, Blomberg stakeholders’ workshop that sought to conclude the Risk Based Supervision deliberations, insurance players said the need to recapitalize will have far reaching implications to the 2,300 USE ALSI INDEX - 12 months 2,250 industry. “You are saying, if I am capitalized at 100 percent, I have to double to 200 percent. 2,200 If you were seated in the shoes of the shareholder, the expectation would be double the return,” a participant from UAP Old Mutual said adding that the analogy is easier said than 2,150 done. Contrary to the compliance-based supervision model, under which insurers were 2,100 formerly supervised ,insurance players will this year heed to new Risk Based Supervision The 2,050 Risk Based Supervision model was introduced after overhauling the Insurance Act of 2017 2,000 which places strong emphasis on understanding and assessing the adequacy of each financial 1,950 institution’s risk management system to identify, measure monitor and control risk in an 1,900 appropriate and timely manner. According to Mr. Ivan Kilameri, an actuary at Insurance 1,850 Regulatory Authority (IRA) ,the proposed minimum capital requirement of general insurers 1,800 will increase to shs6B from 4B , life insurers 4.5B from 3Bn while general re-insurers will 1,750 move up to Shs6Bn. The increments are premised on ensuring that policy holders are not inconvenienced by poorly capitalized companies, especially when settling claims. The Risk 1,700 Based Supervision models serves to adequately capitalize insurers for big risks such as 1,650 infrastructure and oil and gas related investments. (Daily Monitor) 1,600 Cabinet approves Tullow sale of oil shares: Cabinet has approved the proposed Tullow 1,550 Uganda sale of some of its Lake Albert Basin project to Total and China National Offshore 1,500 Oil Corporation .(CNOOC).Tullow, Total and CNOOC hold equal stakes of 33.3% in the Basin covering three blocks- Block one , block two and Kingfisher. While addressing journalists during the cabinet weekly briefing in yesterday, the Government deputy spokesperson, Col. Shaban Bantariza, said: “Cabinet has noted the proposed transfer of interest in Block 1, 1A, 2 and 3A by Tullow Uganda Operations PTY limited to Total E&P Source: Uganda Securities Exchange Uganda B.V and CNOOC Uganda Limited”. However, Tullow Uganda has since entered Crested 9 Price Snapshot: into sale and purchase agreement to farm down 21.5% of the participating interest to Close 52 Week Range YTD % Ch. CNOOC and Total. Tullow will remain with only 11.7% participating stakes in the project, C9 139.15 122.44– 158.15 (4.03) when the transaction process is complete. The company in January 2017. The cabinet in its BATU 30,000 30,000 – 30,000 0.00 sitting presided over by President at State House on Monday BOBU 134.35 109 – 160 (4.04) found nothing much with Tullow pulling out from some of the blocks to concentrate on the DFCU 690 681 – 970 (16.16) ones they can manage.” They have not withdrawn from others because there are more than CQCIL 200 174.23– 262 5.26 one block. There are several blocks in the Lake Albert Graben where there is oil prospecting. NIC 14.00 13.00–19.70 0.00 So they are moving out of these blocks , handing them over to Total and CNOOC so that NVL 337.00 330 – 515 0.55 they can deal with the ones they can manage, he said.” Bantariza dismissed a possibility that SBU 28.90 29.00– 33.00 (6.77) Tullow could be encountering financial challenges. (New vision) UCL 18.00 18.00 – 29.50 (5.26) UMEM 300.00 300– 410 (6.25) Forex Outlook: The Ugandan shilling traded stable on Tuesday on the back of lacklustre *C8 is Crested 8 Local companies Index appetite for hard currency from both merchandise importers and players in the interbank market. The shilling was quoted at 3,674./3,684. (Reuters) Regional Counters: Macro Indicators: Close 52 Week Range YTD % Ch. (%) Period NSE 20 3,004.88 2,708.56– 3,862.27 6.04 Inflation (Year on Year) 2.70 Ended January 2018 BRITAM (Kshs) 9.9 9.32– 15.80 (1.00) Central Bank Rate (CBR) 10.0 05/12/18 SAF (Kshs) 26.50 21.30–32.75 6.75 Bank Rate 15.0 05/12/18 KA (Kshs) 8.90 7.39– 17.99 (1.35) 91-day T-Bill 10.80 26/12/18 NSE (Kshs) 14.0 13.40 – 21.75 (4.12) 182-day T-Bill 12.00 26/12/18 BRL (Rwf) 145 143– 155 (0.67) 364-day T-Bill 13.25 26/12/18 BOK (Rwf) 278 278 – 300 0.00 CTL (Rwf) 53 52 – 64 (1.88) Forex Close Prev. YTD % Ch. Sources: Crested Research, Uganda Securities Exchange, Securities Exchange, GBP/UGX 4,802.36 4,810.92 (2.10) Rwanda Securities Exchange, , Bloomberg EUR/UGX 4,194.24 4,213.97 1.07 KEN/UGX 36.66 36.71 (0.60) CRESTEDCAPITAL RESEARCH CONTACT TZS/UGX 1.58 1.59 1.86 Impala House 1st Floor, Plot 13/15 Kimathi Avenue Hotline: +256 414 230900 RWF/UGX 4.36 4.38 (2.11) @: [email protected], W: www.crestedcapital.com

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