Overall, trading was quiet after the festive period with the unit opening Tuesday’s session trading at the 3720/3730 levels, briefly weakening marginally to trade at the 3740/3750 levels and then later settling to trade at the 3725/3735 levels on Friday morning.
Corporates were remitting mid-month taxes during the week and therefore there was limited activity on the demand side whereas inflows from NGOs, commodity exporters and other sectors remained healthy, keeping the unit within a narrow range throughout the week. Looking ahead, we are still within the window for dividend payments (April – June) and therefore still anticipate some demand pockets. On the other hand, the supply side is still likely to see the usual flows and this is likely to continue keeping the unit within the 3680 – 3800 levels in the coming days.
Catherine Kijjagulwe- Head of Trading at Absa Bank Uganda said Money Markets were liquid during the week despite mid-month tax remittances due to healthy government securities maturities on Thursday, overnight yields traded at averages of 11.36%. Bank of Uganda held a Treasury Bill auction and yields in the 91-day, 182-day and 364-day tenors cleared at averages of 10.384%, 10.512% and 12.502% respectively. Bank of Uganda is scheduled to hold a UGX 400 billion 2-year and 10-year Treasury Bond auction on Wednesday 19th April 2023.
Flows were seen during the week in the Kenyan Market, and this helped service some of the demand tickets. Though overall, there are still outstanding demand tickets that need to be serviced. The currency traded within the 133.00 – 137.00 overall, still weak, and though the market still awaits some Kes strength as the interbank market slowly starts to trade actively.
“The dollar was under pressure on Thursday as jobless claims data printed at 239k – slightly higher than market expectation of 232k. US inflation printed at 5% it’s lowest since 2021 further cementing sentiments that the Fed is likely to end its hiking cycle,” she said.
The Euro appreciated on Thursday to touch highs of $1.1067 (Shs4127) as the dollar weakened and it closed the session at $1.1044 (Shs4118).
The Pound followed suit and also touched highs of $1.2537 (Shs4675) with positive sentiment about the UK Economy. It closed the day at $1.2520 (Shs4668).
Brent Crude traded at $86.24 (Shs321606) a barrel and West Texas Intermediate at $82.37 (Shs307174) a barrel driven by a weak dollar, supply cuts by the Organisation of Petroleum Exporting Countries and increased demand from the European and Asian markets.
Gold traded at $2040.86 (Shs7.6 Million) an ounce.
