Uganda’s capital markets rebound, diversify amid rising investor confidence

Uganda’s capital markets are showing strong signs of recovery and diversification, as post-pandemic investor confidence grows and key innovations take root. The Uganda Securities Exchange (USE) and the Capital Markets Authority (CMA) report a bullish first half of the year, marked by rising stock values, expanded trading volumes, and greater participation across both equities and commodities.

The USE All Share Index, a measure of general market performance, jumped by 25.14% to reach 1,287 points, while the Local Share Index—tracking Uganda-listed companies—outperformed with a 30.42% surge to 337.8 points. Market leaders such as Bank of Baroda, MTN Uganda, Umeme, and Stanbic delivered impressive returns, with some offering over 50% returns on investment, according to USE CEO Paul Bwiso.

“We have seen stocks like Baroda and MTN offer really attractive returns, and that’s what’s driving investor interest,” said Bwiso. He attributed the surge to strong dividend payouts, improved stock valuations, and a strengthening Kenyan shilling, which has enhanced cross-border investor appetite.

Despite isolated setbacks—such as the temporary suspension of Umeme shares in April due to regulatory friction over concession payouts, and the restructuring of MTN Uganda’s mobile money operations—the broader market remained resilient. Uganda Clays and NIC were among the few counters that posted price declines, but the overall trajectory has remained positive.

Trading activity also ticked up, with turnover reaching UGX 38.5 billion. While modestly higher than the previous period, the volume of shares traded rose significantly—by 68%—to 446 million across 3,903 transactions.

Beyond equities, the government securities market also registered increased participation, driven in part by the launch of a mobile-based digital trading system. “This has opened the doors to retail investors, who previously found bond markets inaccessible,” Bwiso noted.

Meanwhile, Uganda’s long-overlooked commodities sector is gaining new ground through the revitalized Uganda Commodities Exchange (UCE). Originally established in 1998 but dormant for years, the UCE is now active with over 6,000 farmers enrolled. The platform facilitates trade in graded agricultural produce—such as maize, beans, coffee, soya, rice, and sesame—while offering warehousing and access to financing.

“We currently have 16 metric tonnes traded and expect to scale this to 25,000 tonnes next season,” Bwiso revealed, highlighting the exchange’s potential to transform Uganda’s largely informal agricultural trade into a structured, value-generating system.

At the regulatory level, CMA has also stepped up reforms to enhance market transparency, investor protection, and innovation. CMA CEO Josephine Okui Ossiya pointed to several milestones, including the launch of Uganda’s first CMA Handbook—a resource that combines investor education with industry research—and the rollout of Regulatory Sandbox Guidelines to encourage fintech innovations in the capital markets space.

Five commercial banks have now been licensed as securities dealers under these new frameworks, while the country has also welcomed its first credit rating agency under CMA’s supervision, a move expected to deepen investor due diligence and trust.

“These initiatives speak to our broader mission of building resilient capital markets that support inclusive economic growth,” Ossiya said.

As Uganda pushes ahead with Vision 2040 and seeks to position Kampala as a regional financial hub, the evolving capital markets landscape—encompassing equities, government bonds, and now commodities—is seen as a crucial pillar. The combination of digital platforms, regulatory innovation, and rising investor appetite may well mark a turning point for Uganda’s financial ecosystem.

While challenges remain—including the need for deeper retail investor engagement and regional harmonization of financial regulations—the renewed momentum signals that Uganda’s capital markets are not just rebounding, but beginning to mature into a more diversified and inclusive space for both institutional and individual investors.