The Uganda Securities Exchange is beginning to hum again. August 2025 did not set any records for turnover — in fact, trading volumes eased to sh7.7 billion from July’s sh10.8 billion. But look closer and you’ll see something more important: both the All Share Index and the Listed Companies Index climbed, 5.6 perspetcive and 6.6 perspective respectively. In other words, prices are rising even as activity slows. That’s not speculation. That’s conviction.
I remember an old
hand at the exchange once telling me: “Paul, the USE does not reward noise;
it rewards patience.” True to form, the market is now rewarding those who
stuck with banks, telecoms, and even a few brave souls who bet on
pharmaceuticals. This is not just my reading of the market, but also drawn from
the SBG Securities Market Performance
Report, August 2025, which has tracked the shifts in liquidity, index
movement, and company-specific developments.
Banks: The Bedrock
of the USE
Stanbic (SBU) has
become the exchange’s workhorse. Up nearly 11 percent in August and 44 percent this year,
it’s backed by profit growth of 18 percent and a return on equity north of 26 percent. At a
PEG of 0.33 and a dividend yield approaching eight percent, it is almost the definition of
growth at a reasonable price.
Bank of Baroda
(BOBU), for years the neglected cousin, has come roaring back. Its PEG of 0.04
is absurdly cheap — a sign that the market has still not fully priced in its
recovery. Throw in a dividend yield of 6–7 percent and you have an old-school income
stock suddenly dressed up as a growth play. DFCU, though still carrying
governance baggage, offers a PEG of 0.18 and a dividend that makes it hard to
ignore for those who like contrarian bets.
Telecoms: Growth
with Cash in Hand
If banks are the
USE’s bedrock, the telecoms are its growth engine. Airtel Uganda and MTN Uganda
both grew profits at close to 30%, and they reward you with dividends of 5–7 percent.
Their PEGs hover around 0.35, telling us their prices are still not running
ahead of their growth. Investors holding these two are not just betting on
Uganda’s future digital economy — they’re already being paid to wait.
QCIL: The Dark Horse
Quality Chemicals
(QCIL) is the quiet revolution. Profits are up more than 80 percent this year, giving
it a PEG of 0.13. That’s ridiculously cheap for a company proving it can scale.
Dividends are modest for now, but for the patient investor, this is the counter
where growth today becomes cash tomorrow.
The Stragglers
Umeme’s numbers
are what happens when story runs ahead of fundamentals: a P/E of nearly 59,
negative profit growth, and no dividend comfort. Uganda Clays and New Vision
remain in survival mode — they look cheap but are actually expensive when you
measure in opportunity cost.
PEG + Dividend Yield Ranking
|
Counter |
P/E |
Profit Growth |
PEG |
Dividend Yield |
Verdict |
|
BOBU |
4.70 |
110% |
0.04 |
~6–7% |
Deep Value +
Income |
|
QCIL |
10.42 |
82% |
0.13 |
~2–3% |
Exceptional
Growth Value |
|
DFCU |
2.68 |
15% |
0.18 |
~4–5% |
Undervalued |
|
SBU |
6.05 |
18% |
0.33 |
~7–8% |
Growth + Income
Star |
|
AirtelU |
10.10 |
29% |
0.35 |
~5–6% |
Growth +
Dividends |
|
MTNU |
9.81 |
28% |
0.35 |
~6–7% |
Growth +
Dividends |
|
Umeme |
58.76 |
-3.6% |
n/a |
<2% |
Overvalued |
|
UCL |
-8.53 |
Negative |
n/a |
0% |
Loss-Making |
|
NVL |
0.20 |
Negative |
n/a |
0% |
Value Trap |
So, How Would One
Allocate a Portfolio?
If I had UGX 100
shillings to put to work today on the USE, guided by PEGs and dividends, here’s
how I’d spread it:
- Banks (SBU, BOBU, DFCU) – 40 shillings
The safest balance of income and growth. Stanbic as the anchor, Baroda for value, and a smaller tilt to DFCU for contrarians. - Telecoms (Airtel, MTN) – 30 shillings
Both are growth-plus-dividend engines. Split evenly. - QCIL
– 20 shillings
The growth bet of the next 3–5 years. Modest dividend now, but strong upside. - Speculative/Opportunistic – 10 shillings
This is where you tuck away a small stake in laggards (UCL, NVL) if you believe in turnarounds, or simply hold cash for better entry points.
Final Word
The USE in 2025
is no longer a market of sleepy counters. It is quietly rewarding those who
study not just prices but growth, dividends, and valuations in tandem. PEG
ratios show us clearly where value still lies — in banks, telecoms, and QCIL.
The rest, for now, are lessons in patience or caution.
DISCLAIMER: The author owns shares on the USE. Analysis
based on the SBG Securities Market
Performance Report – August 2025, Crested Towers, Kampala.
