Uganda Stock Market Commentary – Week Ending Feb. 24

purchase geneva; font-size: small;”>Demand on the counter is still high. NVL and UCL contributed 38% and 12% respectively.

this geneva;”>Top losers were NIC (-22.2%) closing at UGX 35, viagra approved NVL (-2.9%) closing at UGX 680 and BATU (-1.6%) closing the week at UGX 1,900.

The ALSI was up 4.9% to 894.53 while the UGX/USD closed at UGX 2,335.

British firm Tullow Oil signed a long-awaited multi-billion UGX deal bringing French and Chinese industry players into Uganda’s oil sector.

Tullow Oil’s USD 2.9bn (UGX 6.4trn) deal, brings Total and CNOOC as new partners to develop its fields, and paves way for commercial oil production to start. Early, small scale production is set for next year.

A day after selling 67% of its oil shares, Tullow contested Uganda Revenue Authority’s calculation of tax due from the transaction.

URA assessed a capital gains tax of USD 472m on Tullow’s firm-down to Total and CNOOC.

Tullow agreed with the principle that the transaction attracted capital gains tax, but it was expected to claim exemptions on one block and the calculations on two others.


Tullow reported that it paid USD 141m of the USD 427m assessed and would now challenge the tax bill in local courts. By paying 30% of the assessment Tullow is entitled as a Ugandan taxpayer, to appeal the full assessment at a tax tribunal in Kampala.

This will be the second capital gains tax spat between URA and oil companies. The first was a USD 404m contest between Heritage Oil and URA in which the Tax Appeals Tribunal of Uganda ruled in favour of URA stating that URA’s valuations were right and that the oil company should have paid the tax.

A key difference is that while Heritage challenged the principle of paying tax on selling its 50% stake in the oil fields to Tullow for USD 1.5bn, Tullow will seek to pay less than what has been assessed.

The Cabinet deferred a decision on whether Bank of Uganda Governor, Emmanuel Tumusiime Mutebile, should be forced out for his role in the Hassan Bassajabalaba multi-billion compensation scandal that has claimed the political lives of two senior ministers, Syda Bbumba (Minister of Gender) and Khiddu Makubuya (Minister of General Duties).

Meeting behind closed doors in the Cabinet Library, ministers agreed no position could be taken without hearing the Governor’s submission.

Party sources say a Cabinet reshuffle looms as the fall-out from this and other corruption scandals spread.

The President is now faced with seven vacant portfolios in his government after the ministers were forced out of Parliament.

The watchdog committee indicted Mr. Mutebile for writing “letters of comfort” to four commercial banks that guaranteed Bank of Uganda to repay loan facilities taken out by Mr. Bassajabalaba’s Haba Group of Companies in expectation of his compensation from government.

The Committee concluded that Mr Mutebile should be fired from office and be held personally responsible for loss of taxpayers’ money, a recommendation that presents President Museveni with some tough choices.

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