Business and Finance
A quick guide on how to buy or sell shares in Uganda
- An individual wishing to buy shares at USE must approach any of the Licensed Brokers/Dealers and express his/her desire to buy shares of a given listed company. This individual must hand over to the stockbroker/dealer the money equivalent of the number of shares he is willing to buy.
- The Dealer/Broker will deposit the money so received in a Trust a/c- an account specifically opened by the brokers to keep clients money intended for USE transactions. It is a requirement of the USE that for local orders, payment is made upfront by the investor.
- The selected dealer will post the order (bid) on the trading board on the following trading day.
- When the bid matches an offer (an order to sell) by either the same broker or other brokers, then the transaction is considered to have been concluded.
Selling of Shares
An individual wishing to sell his/her shares will have to follow the following procedures;
Contact any of the Licensed Brokers/Dealers indicating his/her desire to sell the shares of a listed company.
The individual will have to surrender his/her share certificate to the Licensed Brokers/Dealers and conclude the process of opening up an account at the Central Depository System (CDS) of the USE.
The Licensed Brokers/Dealers will have to verify the validity of the certificate with the issuer (The verification process takes less than a day), one of the listed companies and deposit the shares/bonds in the CDS.
The Licensed Brokers/Dealers, having opened a CDS account for the client, deposited the shares therein and verified the certificate, will then come to the USE Trading Floor and post the offer on the board.
When the offer equals a bid price quotation, the transaction is considered to have been concluded, and the shares will have been sold.
Types of Orders
A client may instruct a broker to process several types of orders. An order may be;
A Limit order – this is an order which has a specified price when it is posted for execution; or
A Market order – this is an order, which does not have a specific price when posted for execution. This type of an order must be executed promptly at the best price obtainable and will have priority over limit order at the same price levels .It assumes an initial price limit value normally based on the price most advantageous in the market. A market order trades through a range of prices starting at the best price in the market.
For more information visit: http://www.use.or.ug