The Uganda Securities Exchange (USE) is full of companies poised to benefit from rapid economic growth stimulated by the Ugandan government’s heavy investment in new roads and electricity infrastructure.
But how much money do you need to open a USE brokerage account and get started investing there?
Minimum to Invest on USE
There is no minimum amount required to open a trading account. You can start with however much you can afford.
However, when you decide to purchase a stock you must purchase at least 100 shares per transaction.
Therefore, the minimum investment amount depends on the current price of whichever stock you intend to buy.
You can find the current price of each stock listed on the USE scrolling across the top of this page:
Don’t Forget Commissions and Fees
When you buy or sell a stock you will also be charged 2.1% of the total trade value to cover your broker’s commission and various taxes and fees.
Adding It Up
As I write this, the stock with the lowest price is NIC at sh11.00 per share.
Therefore, the minimum amount you can invest at today’s price is sh1123.10.
sh11.00 x 100 shares + 2.1% commission and fees = sh1123.10
On the other end of the spectrum, you’ll need at least sh3,063,000.00 to invest in British American Tobacco – Uganda, which currently trades for sh30,000.00.
sh30,000.00 x 100 shares + 2.1% commission and fees = sh3,063,000.00
A Word of Caution
Keep in mind that a low share price doesn’t necessarily mean a stock is a bargain. Nor does a high share price mean that a stock is overvalued.
A stock’s price must be weighed against a number of factors, including (but not limited to) the underlying company’s earnings, dividends, net assets, and potential for growth.
Where to Start?
Investing in stocks doesn’t offer a guaranteed return.
In fact, it can easily leave you with less money than you started with. And, if you’re new to investing, it can take time to familiarize yourself with different approaches to valuation and financial analysis that can improve your odds of netting a positive investment return.
So, just dip your toe in the water first. Invest only a small amount – an amount that you can easily afford to lose.
And invest first in a company that you know well, preferably one whose products or services you use regularly. Then, as your investment knowledge grows, you can invest more with increased confidence.
Do you have questions about investing on the Uganda Securities Exchange? Let’s hear them in the comments.