Trading on the Uganda Securities Exchange (USE) nearly doubled in the first quarter of 2026 as investors shifted towards shares to earn dividends and benefit from rising stock prices. The increase came as falling Treasury bill yields reduced returns from government securities.
Market turnover rose to Shs34 billion from Shs17 billion recorded in the same period a year earlier, reflecting increased interest in listed companies.
Out of the 11 companies listed locally, seven have paid dividends this year. Quality Chemical Industries Limited (QCIL), Bank of Baroda, Airtel and Stanbic were among the companies attracting investor interest.
QCIL paid a total dividend of Shs12.4 per share in March and July, giving investors a dividend yield of about 7.7%. Its share price also rose by approximately 40%, bringing total investor returns to around 50%.
Bank of Baroda paid Shs6 per share, while its share price increased from Shs47 to Shs90.5. Airtel also raised its first-half dividend from Shs2.97 per share in 2023 to Shs4.9 in 2026.
However, not all investors recorded positive returns. British American Tobacco Uganda paid Shs199 per share but posted a dividend yield of only 1.7%, as its share price fell by 15%.
Dfcu also paid Shs21.81 per share despite reporting a first-half pre-tax loss of Shs26.3 billion. This compared with a profit of Shs39.7 billion in the same period a year earlier, following higher operating costs and litigation expenses.
The growing interest in equities comes as returns on government securities decline. Yields on Uganda’s one-year Treasury bills fell to 11.5% at the September 30 auction, down from 14.8% at the end of 2025.
After withholding tax, investors were left with an effective annual return of approximately 9.2% on the one-year Treasury bills. Meanwhile, ten-year government bonds continued to offer a competitive return of 13.5% after tax.
Uganda’s National Social Security Fund (NSSF) also recorded stronger returns from equities than bonds in the financial year ended June 2026. Its East African equity investments returned about 61%, compared with 16% from bonds.
The figures highlight the growing appeal of shares as investors seek better returns amid declining Treasury bill yields. However, the mixed performance of listed companies shows that dividend payments alone do not guarantee strong overall returns, as changes in share prices can increase or reduce investors’ gains.