The UGX remained unchanged against the USD due to a mild demand for dollars from importers and interbank market. The outlook is for a weaker shilling in the very short term.
French court clears Total Energies
On the bright side, the French court cleared Total Energies on pipeline, Tilenga for any wrong doings. Total energies are the lead developers in The East African Crude Oil Pipeline (EACOP) and Tilenga Oil Project. It was alleged that Total Energies was displacing people from their land without sufficient compensation and drilling on a natural park with endangered species.
But court found evidence hard to accept as valid and submitted accounts in December 2022 were substantially different from those that were presented to Total Energies in in 2019, when the case was initiated. This gives funders confidence and is vital for finalizing financial clauses. It gives potential funders in Europe confidence. We are likely to see more inflows.
Bank Of Baroda calls Extraordinary General Meeting
The new Board Of Governors at Bank Of Boroda was to call for an Extraordinary General Meeting (EGM) of Bank of Baroda (Uganda) Limited which will be held at 11.00AM on the 24th day of March online through electronic platform to transact the following business;
Increase of share capital
To consider and if deemed fit, to increase share capital from Shs. 25,000,000,000/- (Uganda Shillings Twenty-Five Billion only) to Shs. 150,000,000,000/- (Uganda Shillings One Hundred and Fifty Billion only) by issuing bonus shares in the ratio of 1:5 to the existing shareholders.
Amendment in the Memorandum of Association
To consider and if deemed fit, pass a special resolution to amend the Memorandum of Association to increase the Share Capital of Shs. 25,000,000,000/- (Uganda Shillings Twenty-Five Billion only) to Shs. 150,000,000,000/- (Uganda Shillings One Hundred and Fifty Billion only). I wouldn’t advise potential investors to invest in these bonus shares as Bank Of Baroda could be using this strategy to solicit answers to their dire liquidity needs.
EABL and UMEME good investment options
Otherwise share prices of the listed companies at Uganda Stock Exchange barely moved during the month of February 2023. As seen below only EABL had a slight appreciation, as predicted this stock and UMEME should be the ones to invest in this financial year.
|Public Ltd Company||Opening /Closing Price (UGX)|
|British American Tobacco||15,000/15,000|
|Bank Of Baroda||85 / 85|
|Cipla Quality Chemicals||60 / 60|
|DFCU Bank||542 / 520|
|East African Breweries Ltd||5,113/ 5,165|
|Equity Bank Ltd||1,347 / 1,350|
|Jubilee Holdings Ltd||5,378 / 5,356|
|Kenya Airways||112 / 112|
|Kenya Commercial Bank||1,128 / 1,125|
|Mobile Telephone Network||177 / 177|
|National Insurance Corporation||5.00 / 5.00|
|Nation Media Group||427 / 411|
|Newvision Limited||155 / 155|
|Stanbic Bank Ug Ltd||21 / 21|
|Uganda Clays Ltd||15 / 15|
|Umeme Ltd||300 / 300|
In the Money markets, the overnight money was trading at an average of 12% compared to the one-week money that was trading at an average of 12.5%. The auction results for the Treasury bill auction on the 1st of March 2023 were 10.384, 10.512, 12.302 for the 91, 182 and 364days respectively. And as predicted that treasury bill interest rates would hold still because of the tight monetary and fiscal policy and they did just exactly that.
There is no auction of any govt paper next week therefore we are likely to see more activity in the secondary market. But the treasury bill auction will be back on 15th March with 91 days, 182 days and 364 day papers. I predict the rates to slightly dip by 0.3%, ruling out any notable movements changes unless anything drastic happens in this fortnight. Below are the prevailing interest rates for Treasury Bond govt papers on sale in the secondary market.
|Period to Invest in||Indicative interest rate per annum|
Seth Nuwagaba is an investment banker at one of the biggest banks in East Africa.