If there was a single spark that lit up the Uganda Securities Exchange (USE) in July, it was Umeme’s long-awaited dividend. After months in the regulatory shadows, the utility’s return to active trading — and with a payout in hand — turned what might have been a sleepy month into one of the most animated trading stretches this year.
Investors piled in. By the time the month was done, turnover had nearly doubled from June to UGX 10.78 billion. Almost half of that was Umeme alone, the other half largely swallowed up by MTN Uganda, which was riding a different kind of news — the planned structural separation of its mobile money arm. Between the two, they accounted for a staggering 96.7 percent of market turnover. It was as if the rest of the market existed mostly to keep the ticker moving.
The mood was helped along by a macroeconomic backdrop that, while far from perfect, was reassuring enough for investors to take positions.
Inflation eased to 4.1 percent, the shilling stayed firm with a 2.61 percent year-to-date gain against the dollar, and Treasury yields slid across most maturities. Even the slightly softer Purchasing Managers Index reading of 53.6 — down from June’s 55.6 — still marked the sixth month of private sector expansion.
But back on the trading floor, it was all about liquidity and where it was flowing.
Volumes traded jumped 70 percent to 44.3 million shares, the number of deals leapt 38 percent, and the All Share Index was up 5.43 percent, fuelled by strong gains in EABL, QCIL, BOBU, NMG and KA. There were losers too — UCL, MTN, NIC and Centum — but their declines barely dented the overall market lift.
Fixed income traders were quietly active as well, with government bond yields easing at the short and medium end of the curve. Three-year paper dropped to 15.50 percent, and the five-year slipped to 16.13 percent, as inflation expectations settled.
Beyond the numbers, the month carried the sense of a market still too dependent on a handful of big names to keep the scoreboard respectable. Blue chips like Umeme and MTN can stir up liquidity, but they also expose the market’s narrowness — if they sneeze, turnover catches a cold.
For July, though, investors who backed Umeme walked away smiling, dividend in hand, capital gains in pocket, and the satisfaction of seeing the counter back in play. In a market where patience is often stretched thin, that’s a reminder of why long-term holders keep faith. For the rest, it’s another signal that while the USE can spring to life on the back of a big corporate event, it will need a broader base of active counters if the current optimism is to survive the next dry spell.
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