Stanbic Bank to create a Holding Company ‘HoldCo’ that will house the bank and other non-bank subsidiaries aimed at attaining sustainable business growth and not merely a knee jerk reaction to sticky market conditions said the chief executive officer Patrick Mweheire.
Financial market
Monday to Thursday this week, the equity market turnover was relatively low – cumulatively UGX105.5 million only (Monday UGX32.0 million, Tuesday UGX2.5 million, Wednesday UGX11.3 million, Thursday UGX 59.7 million). Only seven of the sixteen listed stocks on the Uganda exchange market traded over the counters.
These DFCU, Stanbic Bank, Bank of Baroda, UMEME, NIC Holdings, Uganda Clays and Centum Investments (Kenya’s cross-listed). The prices remained relatively stable, with Baroda and centum registering some slight up and down movements in share price. The three trading banks (DFCU, Stanbic Bank, Bank of Baroda) jointly account for over a third of the banking sector (by profit or assets).
Money Market
According to the Bank of Uganda statistics found on (https://www.bou.or.ug/bou/collateral/exchange_rates.html), the Local currency was quoted at Ugx3630/3,640 on Monday 19th remained fairly stable closing at UGX 3631/3,641 on Thursday 22nd.
Stanbic to restructure
Stanbic Bank to create a Holding Company ‘HoldCo’ that will house the bank and other non-bank subsidiaries aimed at attaining sustainable business growth and not merely a knee jerk reaction to sticky market conditions said the chief executive officer Patrick Mweheire.
HoldCo will enable the organization to provide both banking and non-banking services and ensure a sustainable long-term business model to secure future success. Additionally, there will be a non-operating holding company (the current listed company) and several other non-banking subsidiaries.
However, Bank of Uganda has to provide the requisite regulatory approvals and also the board decision would require the approval of SBU’s shareholders following the annual general meeting in May 2018.
Fiscal policy
Ministry of finance has submitted to Parliament a request to increase domestic borrowing by UGX 736 billion in a bid to fund 85% of the supplementary budget for FY 2017/18.
Only 3% of the supplementary will be funded by increases in external resources. 49% of the supplementary expenditures is geared towards current activities including salaries (1.3% of the supplementary) and while 51% towards development.
The divergence between the approved and executed budget continues to weaken the credibility of the budget process. If the borrowing is approved, an additional annual interest rate cost of 70 billion will accrue to Government. Already interest rate cost is the largest share of budget funded by domestic sources.
Open Budget Index
Uganda at the second best in Africa after South Africa, while at the global scene Uganda was number 29. UDN in collaboration with UNICEF Uganda, International Budget Partnership (IBP) and the Ministry of Finance, Planning and Economic Development (MoFPED) have released Uganda’s Open Budget Survey 2017 results report.
Uganda’s score in the Open Budget Index declines from 62 to 60 out of 100 and far below the peak score of 65 in 2012. Uganda’s score of 60 (ranking as providing limited budget information) compares favourably to the global average of 42 and the East Africa counterparts – Kenya (42), Rwanda (22), Tanzania (10) and Burundi (7).
The index also shows that the oversight institutions (Supreme audit institution, legislature and the executive) score poorly with an average score of 30 out 100. The rating for supreme audit institution in providing budget oversight is substantial but the legislative and executive oversight is weak.
Transparency Corruption Index
Overall, this this year’s Corruption Perceptions Index highlights that the majority of countries are making little or no progress in ending corruption. Uganda improved its score by one point to 26/100 (where 0 is highly corrupt and 100 is very clean) and its ranks 153 out 180 countries, compared to Kenya (143), Tanzania(103) and best ranked in Africa – Bostwana at 34. Burundi is worst ranked in the East African Community at 157.
READ: Uganda still as corrupt as in 2016, says new report
Uganda National Household Survey 2016/17
This was formally published on the February 19. Based on the 2016/17 UNHS, it is estimated that 21.4 percent of Ugandans are poor, corresponding to nearly 8 million persons lower than the 9.34 million poor people in 1991 but higher than 6.7 million people in 2012/13 and 7.5m poor people in 2009/10.
However, the final UNHS poor people have been revised downwards from the 1st publication of September 2017. The explanation has not been provided. According to the Survey 2016/17, 2.9% of population (37.7m) owned vehicles. This translates to 1.1m.
This is 30% over and above actual number. This therefore suggests that 15,636 households sampled may have been from a relatively higher income bracket thus discounting some of parameters like poverty.
Note: Inflation remains below the Bank of Uganda Target of 5%, having reduced to 3% for the year ending January 2018. Central Bank Rate was this month reduced to 9% the lowest ever since the operation of the inflation targeting regime in July 2011. As a result all Treasury bill rates are now below 10%.
