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Monday, September 26, 2022

Uganda’s Investment in Capital Markets Increases Amidst Inflation

Uganda’s investment in capital markets increased amidst prevailing inflationary struggles. The Collective Investment Schemes (CIS) Assets Under Management (AUM) grew by 1.3trillion from 1.15trillion. Capital Markets Authority (CMA) states that the capital markets grew by a 13.7% increment as of march 2022.

According to CMA, this kind of significant growth has been attributed to the keen consciousness Ugandans have taken in investing, through investor confidence and good regulatory Authority which is up to date among other reasons.

Keith Kalyegira, Chief Executive Officer (CEO) of CMA stated that investing during inflation is a good idea.

“Investing through CIS during inflation makes the most sense, because inflation is eating into the value of the shilling,’ stated Kalyegira.

According to the statement, Ugandans are able to preserve the purchasing power of their savings as returns exceed the inflation rates, with nominal returns on CIS funds which are currently at an average of 10%per annum.

Uganda has five licensed Capital Investment Authorities, which are; Britam Asset managers Uganda Limited, UAP-Old mutual Financial Services limited, ICEA Lion Asset Management limited, Xeno Technologies Uganda Limited, and Sanlam Investments East Africa.

The CMA CEO also stated that the AUM grew by 0.7% from March to June.

“In the same period, AUM for Fund managers licensed by the CMA grew by 0.7% to Shs 3.89trillion from 3.87trillion at the end of March 2022,” said Kalyegira.

Kalyegira added that CIS provides a means through which investors earn a return passive investment. They also ensure that Ugandans take pleasure in having their savings managed by professionals, helps in risk diversifications, low transition costs and exposure to a wide range of securities and investments with smaller sums.

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