THE QUIET RISE OF THE UGANDAN RETAIL INVESTOR

It’s not the sort of headline that makes the front page, but it should.

The Uganda Securities Exchange (USE) recently reported the rise in retail investor participation. In the first half of this year,

Ugandan individuals accounted for 23 percent of market turnover, up from a paltry five percent just a year ago.

Local companies have followed suit, now contributing 28 percent, nearly double last year’s share. In a market long dominated by foreign institutional investors, this is no small shift—and it’s more than just a feel-good statistic.

Local participation matters because it helps smooth out market volatility.

Foreign investors, valuable as they are for depth and liquidity, tend to head for the hills at the first whiff of trouble—whether it’s a wayward post on X, a traffic jam on Entebbe Road, or the perennial jitters of election season. Ugandan investors, by contrast, tend to hold on through the noise, driven by long-term opportunity and better understanding of the local risk, rather than the day’s headlines. And for many, participation in the local capital markets is proving one of the quickest ways to start climbing the asset ladder.

It’s a story Jack could have told us years ago.

He decided early on that he didn’t have the time—or frankly the patience for a side hustle. His job didn’t allow afternoons at the farm, haggling in the market, or chasing after errant boda riders to pay back a “loan.” Instead, he began quietly accumulating shares on the USE. Sometimes with salary loans, other times through disciplined monthly purchases, he kept at it for two decades.

Today, his portfolio has delivered double-digit returns in most years, whether in dividend yields or price appreciation. Over time, he’s added bonds, private equity in a handful of SMEs, and even some forex exposure. But the lion’s share of his wealth sits in USE-listed companies. His route to financial independence is not only legitimate, it’s public and open to anyone willing to try.

Jack’s conviction is showing up in the broader numbers.

The USE All Share Index (ALSI) rose 25.14 percent in the first half of 2025, while the Local Company Index (LCI) surged 30.42 percent, lifted by blue-chip counters like MTN Uganda, Umeme, Stanbic, QCIL, and Bank of Baroda.

Market capitalisation climbed nearly 28.5 percent to sh28 trillion ($7.5b). Trading volumes jumped 68.6 percent to 446.7 million shares, even if turnover only crept up 0.49 percent to sh38.4 billion.

The bond market is also finding its feet.

The alternative bond trading platform saw sh34.23 billion in trades up  

three fold, with nearly half of that in secondary activity. Even the commodities exchange, still small, has signed up over 6,000 farmers and traded 16 metric tonnes, showing ambition to link agriculture with capital markets...

Part of this momentum comes from reforms by the Capital Markets Authority (CMA).

The new Regulatory Sandbox Guidelines give innovators space to test capital-raising products under CMA supervision—potentially unlocking funding for SMEs and key sectors like manufacturing and tourism. Updated Collective Investment Scheme regulations now govern an industry managing sh4.6 trillion, while the proposed CIS Compensation Fund will give retail investors an extra safety net.

Perhaps the most practical development for the average investor is the launch of the Capital Markets Handbook. For years, the USE and CMA have struggled against a knowledge gap—too many Ugandans simply don’t know how to start, what to buy, or how to measure progress. The handbook addresses that, part textbook, part rights manual, part how-to guide for navigating Uganda’s capital markets.

Not everything is perfect. Turnover remains concentrated—MTN alone accounted for 59 percent of trading in H1 2025. And events like Umeme’s planned exit or MTN’s restructuring of its mobile money business could shake confidence if not handled well. The CMA’s close monitoring of these issues is reassuring, but concentration risk remains a structural hurdle.

Still, for the growing band of retail investors, these are good problems to have—problems of scale, growth, and maturity. Jack will tell you the hardest part of investing isn’t picking the right shares, it’s sticking to the plan when everyone else is chasing the next quick return.

Jack’s story is no fluke. It’s part of a quiet revolution. Ugandans shifting from consumption to ownership, from cash under the mattress to equity in productive enterprises.