From Mk Timothy & Company Wiki
| Stock Market |
| Core Concept |
| Category |
Equity Investment |
| A public market for the issuing, buying, and selling of company stocks (shares) at an agreed price. In Uganda, this is the Uganda Securities Exchange (USE). |
| Key Characteristics |
| Key Features |
* Publicly traded securities
- Regulated by a central authority
- Price transparency
|
| Advantages |
* High liquidity
- Potential for high capital gains
- Source of dividend income
- Ownership in major companies
|
| Disadvantages |
* Market volatility and price fluctuations
- Risk of capital loss
- Requires research and knowledge
|
| Investment Metrics |
| Risk Level |
Moderate to High |
| Typical Return |
Varies (historically 8-15% annually) |
| Investment Horizon |
Medium to Long-term (3+ years) |
| Liquidity |
High (most stocks can be sold within days) |
| Growth Potential |
High, especially in growing economic sectors |
| Practical Information |
| Market Access |
Through a licensed stockbroker (e.g., UAP Old Mutual Financial Services, Crested Capital) |
| Minimum Investment |
Varies by broker; can be as low as UGX 100,000 |
| Regulatory Body |
Capital Markets Authority (CMA) |
| Examples |
Shares of MTN Uganda, Umeme, Stanbic Bank Uganda |
| Strategy & Costs |
| Common Strategies |
Dollar-cost averaging, Diversification, Buy and Hold |
| Fees & Costs |
Brokerage fees (approx. 2.1% per trade), CMA/USE fees |
| Tax Implications |
15% withholding tax on dividends for residents |
| Context |
| Historical Context |
The USE was established in 1997 to facilitate capital raising and investment. |
| Impact on Economy |
Mobilizes savings for investment, facilitates privatization, and promotes corporate growth. |
| Related Terms |
Dividend, Capital gain, Stockbroker, Portfolio |
