Africa Market Update - July 2015

MARKET UPDATE – AFRICA | July 2015
+18.6 %
All Share Index
year-on-year change
The latest available data indicates the interbank
rate touched a low of 7.0% on May
29th, 2015. The 91.0 Day yield declined by
130.0 bps, month-on-month, to 12.9% while
the 182 Day declined by 160.0 bps to 13.9%
in June 2015.
Interbank Rate
EQUITY MARKET UPDATE
Uganda Stock Exchange All Share Index
+5.6 %
All Share Index
month-on-month
change
The market
has been fairly
bullish in June
2015 backed
by positive
news on energy
distributor,
Umeme Ltd
(72.9% of market
turnover in June
2015), which
could have
occasioned
bullish investor
sentiments.
Source: Bank of Uganda, StratLink Africa
Yields could, however, resume an uptrend in
the months ahead based on inflation expectations
by investors and domestic borrowing
in financial year 2015/16. The planned
expenditure for 2015/16 surged by 55.2%,
year-on-year, to USD 7.3 Billion compared to
an increase of 28.3% between 2013/14 and
2014/15. As a result, the government may
face fiscal pressures in funding the budget
and possibly necessitate an increase in domestic
borrowing.
As indicated in the graph below, whereas
expenditure is expected to grow by 55.2%,
year-on-year, in 2015/16, revenue is projected
to grow by a lean 15.7% in the same period.
This could be a major catalyst for rising
domestic borrowing in the months to come.
Expenditure vs Revenue (USD Mln)
Source: Bloomberg, StratLink Africa
The market has been fairly bullish in June
2015 backed by positive news on energy
distributor, Umeme Ltd (72.9% of market
turnover in June 2015), which could have
occasioned bullish investor sentiments. The
company announced 19.5 Uganda Shillings
per share in dividend payments despite a
15.7% year-on-year decline in net profits to
USD 21.5 Million in 2014. The company is further
expected to raise electricity tariffs for industrial
users by 0.2% to USD 0.09/Kilowatthour
in Q4, 2015, a matter widely expected
to boost its revenue.
UGSE All Share Month-on-month
Source: Bloomberg, StratLink Africa
Source: Ministry of Finance, StratLink Africa
28 | StratLink Africa Ltd.
www.stratlinkglobal.com