SBG Securities urges patient approach to markets amid regional unrest

KAMPALA, Uganda — Global crises often unsettle markets, but they also create openings for investors willing to take a long-term view, according to analysts and investment advisers.

During a webinar hosted Wednesday by SBG Securities Uganda Limited, economists argued that while escalating conflict in the Middle East may introduce short-term volatility, it could present opportunities for disciplined investors and Ugandan policymakers.

Grace Semakula, chief executive of SBG Securities Uganda Limited, said such times come with uncertainty but advised against panic.

These are times to take a patient, long-term view and consistently allocate funds, Semakula said.

Semakula noted that geopolitical disruptions often allow investors to reposition portfolios and identify emerging opportunities by focusing on fundamentals rather than short-term market noise.

Uganda enters this period from a position of relative strength, with subdued inflation and robust economic growth. Exports, particularly gold and coffee, expanded significantly over the past year.

However, Standard Bank Group economist Christopher Legilisho cautioned that a protracted conflict could weigh on global growth and create spillovers for Uganda.

Central banks worldwide, which were preparing to ease monetary policy as inflationary pressures cooled, may now reassess their approach. Rising tensions have increased the likelihood of higher oil prices.

Because of the conflict, we are starting to see expectations that inflationary pressures could return, Legilisho said. Central banks may become more cautious or preventative in their policy stance.

Bank of Uganda has kept its benchmark policy rate at 9.75% since October 2024. Analysts say the bank could delay rate cuts or tighten policy if inflation accelerates.

Uganda’s trade links to the Middle East also pose risks. Gold is the country’s largest export earner, with about $5.2 billion of the $6 billion shipped annually destined for the United Arab Emirates. Any interruption to that trade route could struggle exporters.

Legilisho noted that such disruptions could accelerate domestic initiatives, such as the Bank of Uganda’s plan to launch a domestic gold purchase program to strengthen foreign-exchange reserves.

Energy markets add further complexity. Higher oil prices would increase Uganda’s import bill for refined petroleum products. However, the long-term outlook remains favorable as Uganda expects its first oil production later this year.

Financial markets have already reacted, with the Ugandan shilling weakening by roughly 3% since the conflict escalated. In an extreme scenario, Legilisho estimates inflation could reach 8.3%, potentially prompting a rate hike.

The scale of the impact will depend on the duration of the crisis. Legilisho said a resolution within a month would likely limit the economic impact, while a multi-month conflict could significantly pressure growth.

Despite the turbulence, SBG Securities advisors emphasize managing volatility. The firm ended 2025 with more than 540 billion shillings in assets under management and added more than 4,000 new clients during the year.

Our role as an investment partner is to help clients see beyond the immediate noise and make informed, long-term decisions, Semakula said.