@young - They may have a choice but the retail investors hardly invest (compared to Kenyans)

The UGX has dived vs US$ & KES... I have shares which have done well in UGX but convert to KES... A waste of time!

Guru / VVS,


Had it been there is a way of arguing this one-on-one via e-mail,to avoid unnecessary writing of arguementative posts, I would have done that
.
Both of you are not looking at the big picture
of what Kenya firms are looking at in Uganda and other East African region,

I believe many firms cannot be all wrong to
cross list, not to talk of opening business in Uganda and other regions. They are aware of the weak UGX, so why is Nakumatt and many others opening shop there ?
What business does Game and Shopriteof south Africa has in Uganda ?


Why are foreigners trouping there?. They are seing what most of us are not seing.

For a typical average Ugandan which was the subject matter that cannot access NSE, if he buys shares in UG bourse, gets dividend in UGX, he /she does not have much to do with KES
.

When the chips are down, the stock market responds positively to inflation.



Best Regards.

Stock market and cross listing principles,market behavior vis-a-vis inflation vs currency value is universal. It does not respect nationalities.

National Economies conforms to this universal princples
Period.

Worldwide it is a known fact that cross listed stock prices are always at close par in the respective countries they are listed.

I had to check that of NSE/USE with respect to KES/UGX at the current exchange rate,


Note 1 KES = 28 UGX (this was 24/25 in Dec 2009)

Here are the Friday 15th Oct closing prices I picked a few samples of Kenyan cross listed stocks.

COUNTER USE(UGX) NSE(KSH) KSH eqv in USE
KCB 640 22.75 22.85
EABL 5,453 196.00 194.00

For clarity reasons :-
(1)
KCB Price in USE = 640 UGX
KCB Price in NSE = 22.75 KSH

KSH equivalent of 640 UGX = 22.85

(2)
EABL Price in USE = 5,453 UGX
EABL Price in NSE = 196.00 KSH

KSH equivalent of 5,453 UGX = 194.75

As expected there is a close relationship between the price in Nairobi and KES equivalent price in UGX quoted prices in Uganda bourse irrespective of the depreciating UGX.

Therefore uganda based retail invester is on track to buy NSE listed stock in their local bourse irrespective of the depreciating UGX against KES, as this is taken care of in the pricing of the stock in the local bourse.