BusyMarkets Kampala #016: Uganda faces a trade deficit as UGX stumbles

BusyMarkets Kampala #016: Uganda faces a trade deficit

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Financial investments are subject to market risks, and readers should do their own research and consult with a professional advisor before making any investment decisions. Furthermore, the views, information, or opinions expressed herein are solely those of the author in their personal capacity; they do not necessarily reflect the views of the author’s employer or BusyContinent.

The Ugandan shilling struggled against the dollar on Monday which can be attributed to increased demand for dollars from fuel and grain importers. Most financial intuitions across the country (commercial banks and forex bureaus) are buying US Dollars at 3,625 and selling at 3635. I was implying that the Ugandan Shilling rallied against USD by 6.37% this year.

Inflation has curled to 3.9%; unfortunately, the country faces a trade deficit. It’s for that reason that National Trading Corporation is being formed. It will generally aim at ending triangular trade, promoting trading with a more diverse range of countries, including Serbia.

StanChart to sell sub-Saharan subsdiaries to Access

Standard Chartered said it had agreed to sell its subsidiaries in five sub-Saharan African countries to Nigeria’s Access Bank, putting into motion a plan announced last year to divest those businesses. Standard Chartered will sell its shareholding in its subsidiaries in Angola, Cameroon, Gambia and Sierra Leone to Access. It will also sell its consumer, private & business banking business in Tanzania to Access Bank, a subsidiary of Access Holdings.

BusyMarkets Kampala #016: Uganda faces a trade deficit

The agreement aligns with Standard Chartered s global strategy “aimed at achieving operational efficiencies, reducing complexity, and driving scale,” it said. I predict that Stan Chart will be closing business in Uganda and Kenya next year because the same challenges can be seen here. This Bank is firmly headed to the Asian & Middle East Markets.

International news

In international news round-up, the Ukraine-Russia Conflict continues to take its toll on the British economy and British businesses. Unfortunately for Britons, Africa seems to be in bed with Russia, across the Sahel to the horn of Africa, from Cape Town to Alexandria.

Niger coup leader warns foreign powers to stay away

With the Economic Community of West African States (ECOWAS), African Union, European Union (France) and United Nations intervening on different but strategic fronts, we continue to monitor the news and make sense of its effects on business on the continent.

Unpleasant news for investors on Nairobi Stock Exchange

As I had earlier predicted in the fourteenth edition, this year has been treacherous for Nairobi Stock Exchange investors. Check out these results from the different listed companies.

  • Safaricom PLC announced a final dividend of KES 0.62, which will be paid on 31 Aug 2023.
  • Crown Paints Kenya announced a dividend of KES 4.0, which will be paid on 14 Aug 2023
  • EABL Kenya announced a final dividend of KES 1.75, which will be paid on 15 Sept 2023.
  • BAT Kenya announced a dividend of KES 5.0, which will be paid on 22 Sept 2023.
  • Total Energies Marketing Kenya announced the first dividend, since they listed, of KES 1.31, which was paid on 31 Jul 2023.
  • Nation Media Group announced a final dividend of KES 1.50 that was paid on 31 Jul 2023.

Money Markets

BusyMarkets Kampala #016: Uganda faces a trade deficit

Overnight money was trading at an average of 10% compared to the one-week cash, trading at an average of 10.5%. There is a treasury bill auction this week; rates will slightly rise for short-term papers as the govt mops out funds to facilitate Local Council elections across the country. Govt has at most One hundred seventy days to organize these much-anticipated elections. Below are the prevailing/indicative interest rates for short-term paper.

91DAY T-BILL 9.0% per annum

182 DAY T-BILL 10.8% per annum

1YEAR T-BILL 12.00% per annum

There will be a two and ten-year treasury bond auction next week. Rate rates will stay put as they have been throughout the fortnight.

2YEAR T-BOND 13.50%

3YEAR T-BOND 13.50%

5YEAR T-BOND 14.75%

10YEAR T-BOND 15.70%

15YEAR T-BOND 17.00%

20YEAR T-BOND 15.00%

Seth Nuwagaba is an investment banker at one of the biggest banks in East Africa.