National Social Security Fund (NSSF), the second-largest shareholder in MTN with an 8.84% stake, earned UGX 31 billion from its shareholding in the company for the year ended June 2023, marking a significant increase from UGX 9.3b in the previous year, according to the Fund’s annual report published today. This makes MTN the highest dividend contributor to NSSF compared to other stocks in the financial year 2022/23.
The report also highlighted that MTN's profit surged to UGX 409 billion in 2022, contributing to NSSF's substantial dividend income. Other top earners for NSSF in terms of dividend income included Safaricom, Equity Group Holding, CRDB Tanzania, and National Microfinance Bank, with respective earnings of UGX 16.1 billion, UGX 19 billion, UGX 14 billion, and UGX 10.6 billion.
In addition to MTN, NSSF has stakes in at least ten companies across East Africa, all of which returned a dividend in the year ended June 2023. Interestingly, four of the top five contributors to its dividends are outside Uganda, accounting for 41.32% of the Fund’s total dividend income.
The Fund’s total revenue due to dividend income rose by 45.42% to UGX 145.12 billion from UGX 99.7 billion in the year ended June 2022, marking the largest growth among its investment vehicles. Despite this growth, fixed income investments remain NSSF’s largest source of revenue, registering a 15.11% increase from UGX 1.9 trillion to UGX 2.2 trillion during the same period.
However, not all revenue streams experienced growth; income due to real estate slightly dropped to UGX 11.94 billion from UGX 11.97 billion. Furthermore, NSSF's total investment portfolio reveals that while 12.51% is held in equities, the majority of its investments are in fixed income and real estate, accounting for 78.4% and 9.01% respectively.
The performance of the Uganda Securities Exchange (USE) has been less robust compared to other markets such as the Nairobi Securities Exchange, according to financial markets analyst Mr. Andrew Mwiima. He noted that the USE has fewer listed companies and is dominated by institutional investors who hold over 50% of shares in local firms, which can hamper liquidity.
Martin Nsubuga, the chief executive officer of the Uganda Retirement Benefits Regulatory Authority, also indicated that many companies on the USE have not been performing well, leading investors to look for alternatives.
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