Written by Ryan Boatman
Today we visited the USE, or the Ugandan Securities Exchange and Crested Brokerage Firm and what an experience it was. We first went to the exchange, which was much different than what we encounter in the United States. On what we would call the “floor”, about 5 brokers were responding to calls about buying and selling shares of 12 publicly traded companies. Although this sounds very small, the USE is fairly new as it is in its twelfth year of operation. What shocked me was that they were using a white board to register all of their transactions, which is completely different from the electronic world the NYSE, Nasdaq, and others use. This manual way of striking deals causes the USE to be way behind the times in terms of trading. Bombay currently trades 6000 times a day, a number of transactions that would take 4.5 years for the USE to complete. The USE is open to the public, which is not the case for the NYSE. Another major difference is the fact that the USE only trades Monday, Tuesday, Thursday from 10:00 AM to 12:00 PM, as the United State’s exchanges trade for five days a week from 9:00 AM to 5:00 PM. This shows a large difference in the interest in the markets and how big of an impact each market has on its’ economy.
Once we were done touring the exchange floor, we sat down and learned a little about how the stock market works in Uganda. I was pleased to hear that the USE is in the process of going electronic, which will help it compete in the global market. It will also allow investors to trade from their homes, just like Americans do with E-Trade, Scottrade, and other online brokerage firms. It will also drive costs down and speed up the pace of the USE to compete with markets like Bombay. I believe this is a huge development for investing in Uganda, as more people will have access to the markets.
We then left the exchange and went to Crested Brokerage Firm, whose Chief Executive Officer is Robert Baldwin, a Wisconsin native who moved to Uganda. He discussed the potential of the Uganda markets and how his motive was to pursue smaller investors that are natives of Uganda. He said that there are only about 30,000-50,000 investors in the market currently and of those about 600 are Crested investors. Not bad for a company that started its’ efforts in 2005.
I think that the USE and its’ brokerage firms that are involved are a huge part of the future of sustainability of Uganda. As the country becomes more stable and the unemployment rate goes down, more people will have excess income to invest in the markets. As the economy grows, more international investors will see the opportunities that exist and will invest in the markets as well.
What were your opinions of the USE?
Do you think that the USE will be a driving force in the sustainability of Uganda in the next few years?
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