What is a Securities Exchange or Stock Exchange?

It is a place (just like a food market) for buyers and sellers to meet and trade financial securities at a negotiated price.

What are Uganda Securities Exchange (which is Uganda’s stock exchange) trading hours?

The Exchange is open 0830HRS – 1730HRS from Monday to Friday and closed on all Ugandan public holidays. Trading at the Exchange takes place on Mondays, Tuesdays and Thursdays between 1000HRS and 1200HRS

What is a share?

A unit of ownership of a company.

Who issues securities?

Companies, the government, local authority, etc…

Why issue securities?

Mainly to raise long term capital for expansion or to pay-off debtors

What is a public flotation?

This is when a company goes public by issuing its shares to the general public, that is, selling part-ownership to the public.

Is there any protection for the investor?

Yes, the Exchange has various regulations, that is, membership regulations, listing regulations and trading and settlement regulations all designed to protect the investor. In addition to this, there is The Council with supervisory roles whose main role is to prevent the commission of frauds or malpractices. The other supervisory body is the Capital Markets Authority (CMA).

Who should invest in shares?

Anyone 18 years of age and above; male or female.

Who is a shareholder?

When you buy shares of a company you become a part owner or shareholder of that particular company.

What are dividends?

These are payments made by the company to its shareholders from its annual profits.

What is an Annual General Meeting?

An annual meeting, which must be held by all public companies, whose shares are held by the public. Here, a report on the company’s performance is made to shareholders who have the right to vote on major policy decisions concerning the company.

How do I choose which shares to invest in?

There is no one method for choosing a particular company in which to buy shares. The easiest way is to talk to a stockbroker or financial adviser whom you trust and by reading the company’s prospectus (business plan). You can also find some valuable information in the newspapers about the listed companies.

Who is a stockbroker and what is his/her role?

A licensed financial professional certified to buy and sell shares on behalf of clients. In addition to this he/she provides professional advice on selection and management of investments.

Do the stockbrokers charge any fees for their services?

Yes, a commission is charged. However, these charges are controlled by the Exchange.

How are the brokers activities controlled?

As members of the USE (that is, Uganda Securities Exchange), they agree to and are regulated by a body of Rules and Regulations, which dictate their relationship with the Exchange, their clients and other members.

What is a prospectus?

A document that gives the financial and management details of a company, that is, the financial history and future plans of the company.

How do I keep track of the Company’s performance as a shareholder?

All companies whose shares are listed on the Securities Exchange are required to publish an annual report, which is distributed to the Company’s shareholders. In addition, the media plays a big role in keeping the public informed and most important of all, USE requires, as a rule, continuous disclosure of information regarding the company from all listed companies.

What role does the investment advisor play?

He/She is a licensed professional who researches the financial status of companies traded on the securities exchange.

Where can I buy shares after the flotation?

Through a Licensed Stockbroker

Can I sell my shares?

Yes, through a Licensed Stockbroker

Can a share be transferred?

Yes, to effect the transfer, you should contract a Stockbroker.

What is the proof of ownership of shares?

A certificate with the owner’s name and the number of shares written on it.

How are the daily prices of securities traded on the Uganda Securities Exchange made known to the public?

USE published a ‘Market Report’ in the newspapers and through the various local radio stations in various languages. This keeps the public informed on any changes in the prices and earnings of listed securities or other material information about the company.

Whom do I approach when I have problems with a share certificate or dividend?

The registrar of that listed company.

Who is the Registrar?

He/She is the keeper of records in respect of quoted stock and shares.

What is the role of the Capital Markets Authority (CMA)?

To establish and oversee the operations of USE and Uganda’s Capital Markets in general. CMA is the appropriate agency to contact to report unethical or illegal acts relating to the Stock Exchange or activities of a broker.