Stocks

It’s getting to that time of year when shareholders start to reap from their investments after the hard work has been done. British American Tobacco Uganda (BATU), released their financials at the end of February, revealing a slight dip in profits.

An 8% reduction in profits before tax is a much smaller reduction than had earlier been feared since the company had earlier released a profit warning. Profit before tax dipped to Ugx 15.7bn, from Ugx 17bn on the back of higher taxes. Higher import duty, income taxes and Value Added taxes took Ugx 63bn off improved revenues of Ugx 270bn.

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Pardon us for some stock basics: Cross-listing of shares is when a firm lists its equity shares on one or more foreign stock exchanges in addition to its domestic exchange.  Cross-listing is aimed to aid firms’ benefit from a lower cost of capital that arises from making their shares more accessible to a bigger pool of investors whose access would otherwise be restricted because of international investment barriers.

Cross-listing also leads to an increase in the liquidity of the stock through the exposure. Many companies see cross-listing as an attractive business venture. Currently, there are eight companies cross-listed on the Uganda Securities Exchange (USE). These are East African Breweries Limited, Jubilee Holdings, Kenya Airways, KCB group, Equity Bank Group, Uchumi Supermarkets, Nation Media Group and Centum Investment Company Limited. 

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