Market Update 11th December 201 9

USE ALSI Close: 1,767.86 Previous: 1,774.62 (UP: 8.25% YTD) - USD/UGX: 3,673.67 Previous: 3,679.58 (UP: 0.90%YTD)

USE ALSI* Key Statistics: Market Synopsis: Close 1767.86 Market activity was low on the day rallying Ugx8.07Mn ($2,196) in turnover. Stanbic 1D* % Change (0.38) Holdings (SBU) exchanged shares worth Ugx5.31Mn ($1,447), dealt MTD* % Change 1.04 Ugx1.90Mn ($518), Group Limited (NVL) made Ugx763,200 ($208) YTD* % Change 8.25 whereas Bank of Baroda (BOBU) generated Ugx87,500 ($24) in turnover. Most 52 Week Range 1,525.46–1,869.69 counters depreciated in value with Umeme losing 4.23% to Ugx272, SBU dropped Volume 241,100 0.99% to Ugx23 and NVL lost 0.31% to Ugx318. BOBU remained unchanged at Turnover (Ugx) 8.07Mn ($2,196) Ugx125. The USE All share Index shed 0.38% to 1767.86 while Crested’s Local PE 22.26 Companies Index, (the C9) declined by 0.74% to 119.58. EPS 56.37 Headlines: Dividend Yield 6.86% looks to encourage borrowing: Bank In yesterday’s release of the Market Cap (Ugx) 24,964.09Bn ($6,795.41Mn) monetary policy statement for December, Prof. Emmanuel Tumusiime Mutebile, the

USE ALSI*- USE All Share Index, 1D*- One Day, MTD*- Month to Date, YTD*- Year to Date bank of Uganda governor, said economic growth declined in 2019 on account of both Source: Uganda Securities Exchange, Blomberg external and internal factors. He, however, said that inflation -the change in the price of 1,900 goods and services – had remained well within the official target of five percent. Mutebile added that the slowdown of the economy throughout 2019 has been driven by USE ALSI INDEX - 12 months both slowing global activity and domestic factors highlighting a low growth rate in 1,850 tourism receipts as well as merchandise exports excluding gold and re-exports as the main causes. Still, Mutebile said he expects the economy to grow at a strong rate. 1,800 “Tourism earnings, exports and bank borrowing have grown lower than we had expected but the economy will still grow at a rate between 5.5 percent and 6 percent which is still higher than the growth in neighboring countries and we expect to sustain 1,750 it into 2020,” Mutebile said. On the current rate of inflation, Bank of Uganda indicated that even though the Consumer Price Index -a measure of inflation -data for November 1,700 2019 released by the Uganda Bureau of Statistics shows that Inflation remained subdued, annual headline and core inflation rose to three percent and 2.9 percent respectively from 2.5 percent and 2.6 percent in October. However, annual core inflation is projected 1,650 to remain below the five percent target until the fourth quarter of 2020. “The increase in inflation was in part driven by higher food crop, energy, fuel and utility prices but our 1,600 relatively stronger shilling and subdued domestic demand will contribute to moderation of the increase in inflation” Mutebile added. (The Observer) 1,550 Govts’ ‘quick-tax mindset’ leaves oil investors cautious: African governments’ appetite for quick tax revenues from oil production is putting off potential investors, denying the continent billions of dollars’ worth of projects. Further, foreign investors 1,500 are concerned about the uncertainty surrounding the taxation measures that African governments impose on the oil and gas sector. According to a report — Africa’s Energy Outlook (2020) — prepared by energy sector lobby group Africa Energy Chamber, such hostile environments are likely to dampen the interest of foreign investors, particularly Chinese oil firms looking to invest $15 billion in the sector in the next four years. It is Source: Uganda Securities Exchange estimated that on average, China consumes around 42 per cent of crude exports by value Crested 9 Price Snapshot: across sub-Saharan African, with Angola exporting the largest volumes of crude to Close 52 Week Range YTD % Ch. China. So far Chinese firms are behind the development of two pipelines that will enable Niger and Ethiopia to become exporters of crude oil and natural gas respectively. These C9 119.58 119.58–156.94 (17.76) projects will lay a combined 2,500km of pipeline to provide export routes via Benin (for BATU 30,000 30,000 – 30,000 0.00 Niger) and Djibouti (for Ethiopia). Africa’s proven oil reserves stand at around 125 BOBU 125 120 – 145 (10.71) billion barrels of oil constituting 7.3 per cent of the global reserves while proven gas DFCU 645 645–849 (21.63) reserves stand at 509.6 trillion cubic feet accounting for 7.2 per cent of global reserves. CQCIL 119.96 119.96 – 261 (36.86) But commencement of commercial production has frequently been delayed by disputes NIC 10 10– 16 (28.57) over taxes and disagreements over field development plan. “Governments must find NVL 318 318 – 370 (6.16) better ways to reconcile their expectations of short-term tax gains with the need for SBU 23 23 – 33 (25.81) sustainable and long-term investment in exploration and production. (The East African). UCL 10.00 10.00– 23.00 (47.37) Forex Outlook: The Ugandan shilling traded little-changed on Wednesday but was seen UMEM 272 182.00 -350.00 (15.00) inclined in the firmer side amid some hard currency inflows mainly from non- *C9 is Crested 9 Local companies Index governmental organizations, traders said. It was quoted at 3,673/3,683, compared to Regional Counters: Tuesday’s close of 3,673/3,683. (Reuters) Close 52 Week Range YTD % Ch. Macro Indicators:

NSE 20 2,600.17 2,419.67– 3,070.33 (7.47) (%) Period Inflation (Year on Year) 3.00 Ended December 2019 BRITAM (Kshs) 8.20 6.10 – 10.65 (17.34) Central Bank Rate (CBR) 9.00 23/10/19 SAF (Kshs) 30.15 21.30–31.20 36.12 Bank Rate 14.0 23/10/19 KA (Kshs) 2.19 2.35– 12.08 (75.53) 91-day T-Bill 8.77 20/11/19 NSE (Kshs) 11.50 9.82 – 15.45 (23.08) 182-day T-Bill 10.78 20/11/19 BRL (Rwf) 139 124– 150 (7.33) 364-day T-Bill 11.55 20/11/19 BOK (Rwf) 265 243– 289 (4.68) CTL (Rwf) 70 50 – 80 32.08 Sources: Crested Research, Uganda Securities Exchange, Nairobi Securities Exchange, Forex Close Prev. YTD % Ch. Rwanda Securities Exchange, Bank of Uganda, Bloomberg GBP/UGX 4,832.50 4,821.88 (2.74) EUR/UGX 4,066.49 4,065.39 4.10 CRESTEDCAPITAL RESEARCH CONTACT KEN/UGX 36.16 36.27 0.60 Impala House 1st Floor, Plot 13/15 Kimathi Avenue TZS/UGX 1.59 1.60 1.24 Hotline: +256 414 230900 RWF/UGX 4.04 4.04 5.33 @: [email protected], W: www.crestedcapital.com

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