July – September QUARTERLY BULLETIN 2020 ACTIVITY REPORT VOLUME TRADED PER COUNTER: MARKET PERFORMANCE During the quarter Stanbic dominated activity, with the EQUITIES counter having 26.5 million shares traded taking 78.22 Trading in the third quarter of 2020 percent of the volume, UMEME recorded 10.93 percent of the registered a tremendous decline with a volume with 3.7 million shares, while Uganda Clays Limited, turnover of UGX1.6 bn compared to UGX CIPLA, National Insurance Corporation and Bank of Baroda 3.4bn registered in the second quarter Uganda, posted 2 million shares, 843,134 shares, 397,400 of 2020 as Uganda’s equity markets shares and 342,083 shares accounting for 6.09 per cent, 2.49 continued to feel the impact of COVID-19 per cent, 1.17 per cent and 1.01 per cent of the total volume pandemic. There was a notable rise in respectively. DFCU, New Vision Limited and British American value traded in September as Corona Tobacco Uganda recorded marginal positions. Virus containment measurers across the globe were eased. Bn 1.6 Stanbic Umeme Uganda Clays Ltd Turnover recorded in % % Turnover recorded in the third quarter of the third quarter of 2020 was a significantly lower compared 2020 was a significantly lower compared to to a combined total of UGX6.3bn that a combined total of 10.93 6.09% UGX6.3bn that was 78.22 was traded between July & September traded between July & 2019. September 2019. CIPLA National Insurance Bank of Baroda According to the Bank of Uganda State of the Economy report for September 2020, concerns around the uncontained 2.49% 1.17% 1.01% spread of the corona virus, coupled with downside pressures on global output continue to weigh down financial market Key Equity Market Indicators – sentiment. Annual Comparisons (Year on Year): Jul 2019 - Jul 2020 – % Market Indicator QUARTERLY TURNOVER Sept 2019 Sept 2020 Change PERFORMANCE PER COUNTER: USE All Share 1,559.53 1,361.95 -12.7 Activity was posted on nine counters, Index summarized as follows; the UMEME counter had the highest turnover with USE Local Index 368.72 338.51 -8.2 shares worth UGX 807 million traded, Market accounting for 50.52 percent of the total Mn Capitalization 21,784.04 18,986.07 -12.8 value traded during the quarter. Stanbic (UGX. bn) accounted for 39.81 percent while CIPLA, 807 Bank of Baroda Uganda, Uganda Clays The UMEME counter Volume Traded 178,832,137 33,889,799 -81.0 had the highest Limited and DFCU scooped 5.02 percent, turnover with shares worth UGX 807 million Turnover ( UGX. bn) 6.3 1.6 -74.6 2.44 percent, 1.04 percent, and 0.64 traded, accounting percent, respectively. New Vision Limited, for 50.52 percent of the total value traded No. of Deals 1,382 958 -30.7 National Insurance Corporation; and during the quarter. British American Tobacco Uganda had a Trading Days 66 65 combined turnover of UGX 8.3 million. Source: USE Product Markets Department 1 Trading Volumes and Activity on a Quarterly Basis: July August September Volume Traded 5,866,658 15,953,311 12,069,830 Turnover (Ushs) 271,741,775 448,563,390 877,691,758 No. of Deals 369 232 357 Trading Days 22 21 22 Daily Avg.Turnover (Ushs) 12,351,899 21,360,161 39,895,080 Daily Avg. no. of trades 17 11 16 Market Capitalization (Ushs. bn) 18,137.94 18,577.94 18,986.07 USE All Share Index 1,301.56 1,332.11 1,361.95 LCI 339.42 338.73 338.51 Source USE Product Markets Department USE INDEX PERFORMANCE The All Share index opened at 1,301.56 rising steadily to a high of 1,332.11 in August and increased gradually to close the quarter at 1,361.95. These gains were a result of a rise in prices on cross listed counters coupled with a weaker UGX. The local share Index fell from 339.42 to 338.73 in August and closed the quarter at 338.51. Below is the graph depicting the ALSI/LCI movements. INDEX MOVEMENT: JUL - SEPT 2020 1400 350 1300 340 1200 330 ALSI LCI Source: USE Product Markets Department Plot 3 - 5 New Port Bell Road. UAP Nakawa Business Park, Block A, 4th Floor Click here to Link/ INVESTING P. O. Box 23552 Kampala, Uganda. Create an SCD Account Made Easy, Fast and T: +256 (3123708) 15/17/18. E: [email protected]. Convenient 2 BOND LISTINGS: There were 6 treasury bonds re-opened in the quarter with a value of UGX 1110bn which were listed. Secondary market trading is over the counter (OTC) through primary dealers. The current total value of the Government Bonds listed on the bourse stands at UGX 13.6 Trillion. Government Bond Schedule as at September 2020 INSTRUMENTCODE ISIN ISSUEDSHARES ISSUEDATE RATE MATURITY FXD/2/2011/10YR UG0000000865 710BN 2011/02/02 11.00 2021/01/21 FXD/02/2016/5YR UG12H1802216 345BN 2016/02/24 18.38 2021/02/18 FXD/05/2016/5YR UG12H1305210 100BN 2016/05/18 16.50 2021/05/13 FXD/09/2016/5YR UG12H2109215 100BN 2016/09/27 16.50 2021/09/21 FXD/11/2016/5YR UG12H2810218 200BN 2016/11/03 16.75 2021/10/28 FXD/12/2016/5YR UG12H0312217 100BN 2016/12/09 17.00 2021/12/03 FXD/05/2017/5YR UG12H1305228 156.3BN 2017/05/19 15.38 2022/05/13 FXD/7/2012/10YR UG0000001079 1.615TN 2013/08/14 11.00 2022/06/09 FXD/07/2017/5YR UG12H0707226 300BN 2017/07/13 14.13 2022/07/07 FXD/12/2017/5YR UG12H2811224 156.3BN 2017/12/04 12.50 2022/11/28 FXD/6/2013/10YR UG0000001244 1.035TN 2013/04/24 11.00 2023/04/13 FXD/1/2014/10YR UG12J1801248 810BN 2014/01/30 14.00 2024/01/18 FXD/05/2019/5YR UG12H1005240 153.7BN 2019/05/17 14.88 2024/05/10 FXD/8/2014/10YR UG0000001467 1.070TN 2014/08/13 14.00 2024/08/01 FXD/1/2015/10YR UG0000001517 100BN 2015/01/28 11.00 2025/01/16 FXD/12/2015/10YR UG12J1812252 120BN 2015/12/30 19.50 2025/12/18 FXD/08/2016/10YR UG12J2708269 540BN 2016/09/08 16.63 2026/08/27 FXD/5/2017/10YR UG12J0605277 360BN 2017/05/18 16.00 2027/05/06 FXD/1/2018/10YR UG12J1301280 220BN 2018/01/25 14.13 2028/01/13 FXD/12/2013/15YR UG0000001376 220BN 2013/12/04 15.25 2028/11/16 FXD/2/2015/15YR UG0000001533 1.865TN 2015/02/25 14.25 2029/08/23 FXD/5/2015/15YR UG12K0205308 120BN 2015/05/21 17.50 2030/05/02 FXD/4/2016/15YR UG12K0304317 570BN 2016/04/20 17.00 2031/04/03 FXD/3/2017/15YR UG12K0403325 320BN 2017/03/23 16.38 2032/03/04 FXD/2/2018/15YR UG12K0302337 750BN 2018/02/22 14.38 2033/02/03 FXD/7/2019/15YR UG12K2206346 1.345TN 2019/07/11 14.25 2034/06/22 CORPORATE BOND SECONDARY MARKET ACTIVITY The Corporate Bonds segment remained inactive throughout the period. Investors in this segment have continued to hold onto their investments and receive interest that is paid out semi-annually. Below are the corporate bonds currently listed on the USE; 1. African Development Bank Bond maturing on 01.02.2022 2. Kakira Sugar Limited Bond maturing on 07.12.2023 3 (Source: Bank of Uganda September 2020 State of the ECONOMIC & FINANCIAL Economy DEVELOPMENTS: JULY – SEPT 2020 INTERBANK RATES: JUL - SEPT 20 10.00 9.00 INFLATION – OUTLOOK AND RISKS 8.00 Annual headline and core inflation averaged at 4.6 percent and % 7.00 6.0 percent in the third quarter of 2020, rising from 3.4 percent 6.00 and 3.8 percent registered in the second quarter of 2020, 5.00 respectively. Higher headline inflation was driven by hiked 4.00 transport fares in response to government issued standard operating procedures for public transportation aimed at Overnight 7-Day Rate Overall Rate containing further spread of the COVID-19 pandemic. Annual Upper Bound Lower Bound CBR food crops inflation remained low averaging a deflation of Source: Bank of Uganda 5.8 percent. Year on year Energy, Fuel and Utilities inflation decreased to 2.3% in September 2020 from 8.3% in June 2020. Yields on Government securities The path for CPI inflation over the next 12 months largely The yield curve dropped in the period between July 2020 and reflects the influence of containment measures particularly on September 2020 due to the accommodative monetary policy public transport and increases in prices of imported consumer pursued by the Central Bank coupled with sustained demand goods due to higher taxes to support import substitution. for government securities. However, the decline in food crop and energy prices and subdued demand could partly hold inflation down. Core Investors focused on the short-term end of the curve due inflation is expected to peak at 6.1 percent in the first quarter to expectations of a rise in interest rates ahead of the 2021 of 2021, while headline inflation could peak at 6.2 percent. In General Elections. Rates on the 91-Day, 182-Day and 364- the medium term, the inflation outlook depends primarily on Day averaged 8.5 percent, 10.1 percent and 12.2 percent the speed and strength at which demand and supply recover. in Q3’20 compared to 9.1 percent, 10.8 percent and 12.6 (Source: Bank of Uganda September 2020 State of the percent, respectively.