Two years ago I took the plunge and bought my first allotment of shares on the USE. It was the stanbic Bank IPO. A novel idea for Uganda and the public was understandably not too sure what it was all about and consequently did not take up all the shares on offer. Regrettably I bought fewer shares than I should have because I thought the issue would be over subscribed and thus I would spend days trying to get a refund.
As it happened I got my 20,000 shares, at Ugx 70/- and it had appreciated to a high of 255/- at one point, well over 300%. And I was delighted, wished I had bought more, but by then the price was too high. It is profitable company, pays good dividends per share, has a large market share, I am happy to hold it as a 'blue chip' stock in my portfolio.
I have not invested much more on the Ugandan stock exchange, deciding to go for the nairobi one instead. it has more choice on offer and is far more vibrant. But that does not mean their is no money to be made in the USE.
How ever, as any shareholder will tell you there is a crisis worldwide and it has affected us too. Shares prices are down....sharply. My beloved Stanbic is trading at 150/-. I have resisted the herd mentality that is saying sell, sell, sell. And the reason is that there is nothing fundemantly wrong with stanbic, it is still worth more than what I paid for it. And compared to a savings account, shares (equities) offer a better return on investments as long as you take a mid to long term view of them (3-5 years). There may be dips in the market, but these are often wiped out over the long run, just make sure you only invest in businesses you understand, not ones that seem fashionable, read the fiancial press and take professional advice when necessary.
currently people are scrambling and selling their shares left right and centre and definitely making a loss. The savvy investor with the cash then picks up the good value stocks at low prices and makes a killing when the market recovers. That said, it is understandable that ugandans are still on a learning curve about investing in stocks and we should take these ups and downs in stride.
5 comments:
Don't give up on USE just yet. It's only 10 years onld remember? I started investing in Uganda Clays shares seven years ago and haven't looked back. I've spread out my investment portfolio a bit and it has paid back. Of course the ups and downs have taken a bit of a toll, but I haven't been knocked out.
Speaking of NSE, it closed for a few minutes sometime this week because shares took a sudden 5% dip. More at bankelele.blogspot.com (the dude should pay me for all the ads I do for his blog).
I don't agree with the bit of investing in areas we understand because most of us have a very naive understanding of stocks. It would be difficult to predict whether safaricom will do better that clays.
Or, maybe it's just me
Invested about 4 years ago and have never had cause to regret it. I'm definitely not selling now. Will play the waiting game.
Tumwijuke: Its great to hear your a longterm investor, time tends to favour people who are patient. The NSE like most stock exchanges does have a safety mechanism that kicks in when there is an unexplained drop in the index value, mosst places its 10% . This is designed to give investors are breather and time to think...helps avoid a mad rush.
Kobayashi: It is very prudent to only invest in things you can understand, see and evaluate, especially in the beginning. As you mature you can dabble in many things. You can make up for this by reading up about he companies you want to buy into, read their financial reports and the stories in the newspapers.
Learn what makes these companies tick before you put your money in it.
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