Uganda’s Capital Markets Post Strong Growth In First Half Of 2025

By Gad Masereka

Uganda’s capital markets posted a strong performance in the first half of 2025, buoyed by macroeconomic stability, improved investor confidence, and regulatory reforms that continue to reshape the financial landscape.

The Capital Markets Authority (CMA) and the Uganda Securities Exchange (USE) unveiled the half-year results at a press briefing in Kampala, describing the sector’s progress as both steady and transformative.

CMA Chief Executive Officer Josephine Okui Ossiya noted that the market’s resilience reflects a collective effort to deepen investment opportunities and enhance investor protection. “We are delighted to report on the strong performance and strategic milestones achieved in the quarter ending June 2025,” she said. “Our focus remains on building an efficient, fair, and transparent capital markets industry that serves the interests of all Ugandans.”

The results show that Uganda’s economy has provided a supportive backdrop for the capital markets. The shilling appreciated by 0.4 percent against the US dollar while inflation remained under control, averaging between 4.5 and 5 percent.

Economic growth stood at 6.5 percent in the first half of the year, compared to 6 percent over the same period in 2024, with the medium-term projection rising to 7 percent. The Central Bank Rate eased slightly to 9.75 percent, signaling a more favorable environment for borrowing and investment.

Performance on the Uganda Securities Exchange mirrored these economic fundamentals. The All Share Index surged by 25 percent to close at 1,287 points, propelled largely by cross-listed counters and stronger results from local firms.

The Local Companies Index grew even faster, gaining 30 percent to 337 points, driven by strong returns from MTN Uganda, Stanbic Bank, Bank of Baroda, Umeme, and pharmaceutical firm QCIL. Market capitalization also expanded, with the All Share value rising by 28 percent to UGX 28 trillion, while locally listed firms grew by 22 percent to UGX 13.9 trillion.

Trading activity gained momentum, with turnover edging up to UGX 38.4 billion. The volume of shares traded jumped by 68 percent to 446.7 million, while the number of transactions increased by nearly a quarter.

Although institutional investors continued to dominate, accounting for 72 percent of market activity, participation from individuals and local companies grew notably, a sign of deepening domestic engagement. Foreign investors remained active, contributing 43 percent of total turnover.

Beyond equities, the fixed income market recorded striking growth. The alternative bond trading platform posted a turnover of UGX 34.2 billion, more than double the previous year’s performance.

According to the authority, commodities trading also continued to expand through the USE Commodities Exchange, which is supporting over 6,000 farmers with a warehouse capacity of 102,000 metric tonnes.

The CMA underscored regulatory strides that it believes will set the tone for future growth. New sandbox guidelines were approved, allowing fintech innovators to test products in a controlled environment.

Regulations for Collective Investment Schemes were gazetted in May, strengthening oversight for a sector now managing UGX 4.6 trillion.

The authority also introduced draft compensation fund rules to safeguard investors, alongside the approval of new dealer licenses for five commercial banks, bringing them in line with global market standards.

Centenary Bank became the latest entrant into custody services, while ICRA, a regional credit rating agency, was licensed as Uganda’s first under the CMA framework—an initiative expected to bolster the corporate bond market.

New investment products, including a dollar-denominated fixed income fund by SBG Securities, were also approved, widening options for investors.

Market developments were also addressed. The CMA assured shareholders about MTN Uganda’s structural changes, confirmed the completion of East African Breweries Limited’s tender offer that raised its stake in Uganda Breweries to 98 percent, and noted compliance levels among listed firms, with most companies submitting timely financial statements and holding annual general meetings.

A key highlight of the briefing was the launch of Uganda’s first Capital Markets Handbook, a resource intended to serve as a guide for investors, policymakers, and researchers. “This handbook is a testament to our commitment to transparency, investor education, and the overall development of a robust and accessible capital market in Uganda,” Mrs. Ossiya said, urging Ugandans to take advantage of the resource to broaden their financial literacy.

Analysts say the mid-year results reflect Uganda’s ambition to strengthen its capital markets as a driver of long-term growth.

With reforms aimed at attracting private capital, fostering entrepreneurship, and boosting job creation, regulators believe the country is positioning itself as a competitive destination for investment in the region.