Transcript african alliance business form presentation

The Uganda Capital Markets
African Alliance Uganda Investment Bank
A Broker /Dealers Perspective
Contents
•
Introduction
•
Areas of Excellence
•
Uganda Country Report
•
Broker/ Dealer Firms
•
The Markets
•
The way forward
The African Alliance Group Structure
African Alliance International
Africa Growth Advisors
Specialist Asset Management
Consultants
African Alliance Uganda
Domestic Fund Managers
Research Professionals
African Alliance Kenya
African Alliance Botswana
African Alliance Swaziland
•
African Alliance Uganda forms part of the African Alliance International group.
•
African Alliance Uganda is 100% owned by African Alliance International
•
Africa Growth Advisors is a support team that provides technical assistance
and advisory services to the domestic investment professionals.
•
The group is owned and managed by management and staff – this aligns the
interests of our investment professionals with that of our clients. Our client’s
come first, not external shareholders!
Areas of Excellence
AAU
Investment
Banking
Advisory &
Corporate Finance
Stock broking
Trading and
Execution
Investment
Management
Research
Money Fund
Unit Trusts
Pension Funds
Balanced
Investment Fund
High-Yield Fund
Institutional Clients
Uganda Country Report
•
•
•
•
•
Strong economic fundamentals and improving business conditions
promises future growth
Uganda’s strong economic growth, commitment to macroeconomic and
political stability, flexible labour markets, access to international markets,
abundant natural resources, and enabling regulatory environment make it
an attractive destination for investors, though many challenges remain.
Telecommunications, transport and power infrastructure, tourism,
financial services, coffee, and horticulture sectors offer key investment
opportunities.
Some of the major challenges faced by foreign investors are inadequate
physical and institutional infrastructure, uneducated workforce, political
interference, non-transparent regulatory system, and high levels of
corruption.
Thus far, Uganda has shown resilience and has grown at a respectable 7%
in FY09. In next few years, the growth is expected to decelerate due to
weak global demand and the countries dependence on exports and donor
funding.
Investment Prospects And Outlook
•
•
•
•
•
•
•
•
•
•
•
Uganda’s economy expected to decelerate in FY09 and FY10 driven by weak global
demand
Services sector continues to drive growth
Growth of exports is expected to remain low; coffee exports present an exciting
opportunity
Expansion of the East African Community (EAC) customs union will drive further
growth
FDI inflows in 2009 and 2010 remain uncertain due to the global financial crisis
Ratio of debt to GDP may increase marginally in FY09 and FY10
Inflation is expected to fall in 2009 and 2010 as the economy stabilizes and fuel prices
fall
Government initiatives to improve business climate continue to have a positive
impact
Government is expected to continue its focus on infrastructure development
Increasing presence of micro-finance institutions will provide credit access to all
sections of the society
In Africa, Uganda is a leader in social development initiatives
Key Indicators
Population, 2008 (m)
GDP, FY09 (USD bn)
GDP (PPP) per capita, 2009 Intn’l $
31.7
15.3
1,340
Sector share, FY09 (% GDP)
Agriculture (%)
23.7
Industry (%)
24.2
Services (%)
46.4
Headline Inflation, FY09 (%)
14.1
Exchange Rate, FY09 (UGX/USD)
1,885
Trade Balance, FY09 (% of GDP)
(6.7)
Reserves, May’09 (Eq. months of imports)
5.3
Financial Markets
•
The financial services sector is underdeveloped with low penetration rates
•
Various structural changes are driving the banking sector growth.
•
Microfinance has witnessed steady growth and commercial banks have
also started to expand their presence in this market
•
Insurance in Uganda is an underdeveloped sector with majority of the
insurance companies offering non-life insurance
•
The collective investment scheme market is still in its nascent stage.
Pension sector reforms in the future may drive growth. African Alliance is
the only unit trust manager
•
Uganda’s social security system has limited scope and coverage.
Liberalization of the pension sector is required
•
•
Interest in the equity market has increased overtime
Fully liberalized currency environment
•
However the market is still illiquid with majority of the trading restricted to
only 2 stocks.
Market Environment
•
•
•
•
Products: Equities, Corporate Bonds, Government Bonds
Custodians – Barclays Bank, Stanbic Bank; Safekeeping for securities and
trade settlement
Securities Central Depository (SCD) replacing paper-based system
Broker/dealer firms being given access to government securities market,
enabling “one-stop-shop” access to range of available products in the
local financial markets
List Of Brokers/Dealers On The USE
Members Of The Uganda Securities Exchange
:
African Alliance (Uganda) Ltd *
Baroda Capital Markets Ltd *
Investment Advisor
Broker/Dealer and member of USE
Floors 1st Workers House
Pilkington Road
Kampala
Tel: 0414 235577
Fax: 0414 235575
E-mail: [email protected]
Contact: Mr. Kenneth Kitariko
Broker/Dealer
Investment Advisor and member of USE
Plot 18 Kampala Road
P.O. Box 7197
Kampala
Tel: 0414 233 680/3
Fax: 0414 258263
E-mail: [email protected]
Contact: Mr. Rajesh Khanna
Crane Financial Services Ltd *
Crested Stocks and Securities Ltd*
Broker/Dealer
Investment Advisor and member of USE
Crane Chambers
Plot 38 Kampala Road
P.O. Box 22572 Kampala
Tel: 0414 341414/345345
Fax: 0414 341414
E-mail: [email protected]
Contact: Mr. Hiren Busch
Broker/Dealer
Investment Advisor
6th Floor Impala House
Plot 13/15 Kimathi Avenue
P. O. Box 31736
Kampala, Uganda
Tel: 0414 230900
Fax: 0414 230612
E-mail: [email protected]
Contact: Mr. Robert Baldwin
List Of Brokers/Dealers On The USE
Members Of The Uganda Securities Exchange
Dyer and Blair Uganda Ltd *
Equity Stock Brokers Ltd *
Broker/ Dealer
Investment Advisor and member of USE
P.O.Box 36620
Ground Floor Rwenzori House
Tel: 0414 233050
Fax: 0414 231813
E-mail: [email protected]
Contact: Mr. Njirwa Samuel
Broker/Dealer
Investment Advisor and member of USE
Plot 6/6a Orient Plaza
P.O. Box 3072
Kampala
Tel: 0414 236012/3/4/5
Fax: 0414 348039
E-mail: [email protected]
Contact: Mr. Mark Horwood
MBEA Brokerage Services (Uganda) Ltd
ReNaissance Capital (U) Ltd*
44 Lumumba Avenue, Nakasero
P.O. Box 24613
Kampala
UGANDA
Tel.: +256-(0)-423 1960 / +256-(0)31-226 0011
Fax: +256-(0)41-434 2045
E-mail: [email protected] (General)
Web Site: www.mbea.net
Contact:
Andrew Otengo Owiny
Fund Manager, Investment Advisor
Broker/Dealer and member of USE
Plot 13, Kololo Hill Drive
P.O.Box 893
Kampala
Tel: 078 800494, 031 264 775/6 Fax: 0414 340016
E-mail: [email protected]
Contact: Mr.Godfrey Wavamunno
Pan African Trading Desk
•
Through this desk our clients have access to a centralised trading desk that provides
access to all the stock exchanges across Africa.
•
Our pan-African trading desk trades in equities and bonds and we have execution
capabilities in Africa in the following countries: Botswana, Egypt, Ghana, Kenya,
Mauritius, Morocco, Namibia, Nigeria, Tunisia, BRVM (Covers 8 French speaking
countries in West Africa), Uganda, Rwanda, Tanzania, Swaziland, Zambia, Zimbabwe
and Malawi.
•
African Alliance currently has its own offices and licenses to operate in Kenya, Uganda,
Swaziland, Botswana, Malawi, Ghana , Rwanda and has just been granted its license
and stock exchange seat in Zambia where we are in the process of setting up offices. In
all the other countries we have strategic alliances in place to trade through other brokers
until such time as we have our own offices and licenses to trade in those countries.
•
As such, we are able to execute transactions in the above countries at present and this
covers all but a few countries that have small stock exchanges at present, namely: Cameroon, Algeria, Sudan and Mozambique but we are looking to operate in these fairly
soon too. We do, however have relationships in these markets and would be able to execute
the more bespoke trades.
•
We allow our clients to either deal through the international trading desk in the
Johannesburg office or directly with the dealers in our own offices or those of our affiliate
partners.
Equity Market
•
The USE index rose sharply by 21% in Q 2 2009 clawing back losses recorded in Q 1 2009.
However the gains on the USE board need to be put into context.
•
Firstly, the USE index includes cross listed stock from Kenya. Secondly Stanbic Bank has a
weighting of over 60% of the total market capitalization of local Ugandan stocks excluding
the cross listed stocks.
•
All Kenyan cross listed stocks recorded strong gains in Q 2 2009 and hence helped skew
the index. Further to this, despite all other domestic stocks recording big losses Stanbic
Bank rose 33% during the quarter. The twin gains on the Kenyan cross listed stocks and
Stanbic offset the big losses on all the other domestic Ugandan stocks to record the gain on
the ALSI.
Following the fall in prices of domestic counters on the USE board, the broad market ex
Kenya is beginning to make sense and now looking comparable to other markets. We
believe that a closer look at these counters may now be worthwhile.
•
Uganda Securities Exchange
•
Source: Uganda Securities Exchange
20
1200
18
1000
16
14
800
12
10
600
8
400
6
4
200
2
0
0
Jan-08
Jul-08
Turnover (UGX bn)
Jan-09
All Share Index (rhs)
Jul-09
EAC Region Stock Exchanges (FY09)
•
Source: African Securities Exchange Association
60
50
40
30
20
10
0
Listed companies
Market capitalization (% of
GDP)
Kenya
Tanzania
Turnover rate
Uganda
Fixed Income Market
•
Most of the trading on USE takes place in the fixed income market with foreign participation
limited to this segment. As on June 2009, 30 fixed income securities were listed. The total
outstanding stock of treasury bonds grew by 74% to UGX 1,484 bn in June 2008.
1600
1400
1200
1000
800
600
400
200
0
FY98
FY00
FY02
Treasury Bills
FY04
FY06
FY08
Unit Trusts-Uganda Funds
Uganda Funds
3-year Annualised
Return
Current
Uganda Money Fund
12.82%
9.80%
Uganda Balanced Investment Fund
19.23%
2.49%
Uganda High Yield Fund
14.46%
17.30%
The Uganda Money Fund -Capital Preservation
Investor
UGX 1,000,000
Investment Universe
• Banks
• T-Bills
• Bonds
Units
UGX 600,000
UGX 200,000
Bank Call
Account
UGX 200,000
T-Bills/
CP
Short-term
Bonds
The Parties to the Unit Trust Funds
Auditor
Cash and Investment
Manager
KPMG
African Alliance Uganda
African Alliance Uganda
Unit Trust Funds
Your
Business
(Separate legal entity)
Trustee
Custodian
DFCU Bank
DFCU Bank
Capital
Markets
Authority
The way forward
Eight Broker
Dealers
Excellent Growth
Opportunities
Central
Depository
System
Unit Trusts
Corporate Bonds
Strong Pan
African Base
Platform for
Complementary
Products
Top Ranked
Research with
Local and
Regional
Penetration
Contact Details
• Contact Details
Kenneth Kitariko
African Alliance Uganda
1ST Floor Workers House
Pilkington Road
Tel : +256 414 235 577/8
Mobile: +256 755 000 043
E-mail : [email protected]
[email protected]
[email protected]