THE USE CONTINUES TO BE UGANDA’S BEST KEPT SECRET

A report last week by brokerage firm, Crested Capital on the Uganda Securities Exchange (USE) showed 2024 is proving to be the exchange’s best year in almost a decade with index rising 33 percent, suggesting a recovery in the general economy from the covid pandemic and concerns about the war in Ukraine.

"Its best local movers since the beginning of the year, have registered total returns – dividends and price appreciation, of between 15 and 73 percent...

If you had bought a share of Quality Chemicals at the beginning of the year, January 2 at sh52.50 not only would you have earned 10.36 percent or sh5.7 but also seen the share price appreciate to sh55.

On the other side of the scale if you had bought Stanbic bank shares at the beginning of the year at sh32.03 you would have earned sh8.2 per share or about 25 percent and benefitted from a share rise to sh52 or a 62 percent increase in value by the end of October.

Of course some shares had a torrid time, with Uganda Clays which suffered a share price loss of 30 percent, being the worst performer.

The bad performers notwithstanding, investing on the USE is proving a lucrative opportunity for those involved.

This column has sung over the years, that that there are only two ways to spend your money, you either consume it or you invest it. Oftentimes people complain that they have too little money to invest, investing in their heads is about committing millions and even billions to an endeavour with the hope of future returns.

"The beauty of the USE is that with as little as sh10,000 you can buy shares and start your investing journey...

This is important because whether you invest or not, time passes and your financial health will suffer for not having invested when you could. They say the best time to invest is 20 years ago but the next best time is today.

What many of us don’t know or never learn, is that building wealth is about accumulation, it’s not how much you earn, but how much you keep of what you earn that makes you wealthy. Obvious to a few, but to the majority this simple fact totally passes over their heads.

The proof of this is that about 10 percent of the population own 76 percent of the wealth globally according to the World Economic Forum (WEF). This is not by mistake.

The wealthy have over time shifted their spending towards investment, away from consumption and that is why they own almost everything. The rest of us mere mortals are content to enjoy the adrenalin rush that comes with spending money, especially if people around us can see us doing it. And then to further salve our egos we convince ourselves that the wealthy are sad with all their money and will not even finish it anyway, by the time they die. This thinking, prevalent among the broke 90 percent, would be funny if it wasn’t sad.

We need to shift our mindset towards wealth creation and away from consumption. Because before anything happens, first a thought.

The difference between the wealthy and the rest of us, is down to a difference in the way they think about money. Of course it is nice to think they are lucky and you are not, but that is not it.

You don’t have to look very far to see this. If you were given sh100,000 now, out of the blue, what would be your first thought? For 90 percent of us, we would think about how we are going to buy food or new shoes or clothing, basically eat the money. For the remaining 10 percent they would be wondering how to deploy this money to give themselves the chance of returns sometime in the future.

The problem for most of us is that wealth creation is boring. You cannot show it off on Instagram or snapchat. The results – a better standard of living, is what is attractive, but it takes too long to show this off, so why not fake till we make it? The problem is, if you continue faking it, your chances of making it are minimized.

Since the beginning of the year the USE saw trading in shares of about sh61b or about sh1.5b a week. Bank of Uganda reported that in the 12 months to June this year, mobile money transactions of over sh200trillion were recorded on all platforms.

Using a rough comparison, essentially that the USE turnover was only 0.03 percent of all mobile money transactions. By extension this suggests that the beneficiaries of the USE current rally or wealth creation are less than three hundredths of a percent of the population.

If I did not know better even I would think the USE’s beneficiaries are lucky.