Finance 1 Coursework

Michael Sekamanya
Cass MEMBA August 2009
 Contents

INTRODUCTION......................................................................................................................................................... 1
1.1 USE COMPANIES ....................................................................................................................................................... 1
1.2 FTAS COMPANIES ...................................................................................................................................................... 2
ANALYSIS .................................................................................................................................................................. 3
1.3 THE USE PORTFOLIO .................................................................................................................................................. 3
1.3.1 The Efficient Portfolio (USE).............................................................................................................................. 4
1.3.2 Lending and Borrowing..................................................................................................................................... 5
1.4 THE FTSA PORTFOLIO ................................................................................................................................................. 6
1.4.1 Market Sensitivity............................................................................................................................................. 7
1.4.2 The Efficient Portfolio (FTAS) ............................................................................................................................ 7
1.4.3 Lending and Borrowing..................................................................................................................................... 8
CONCLUSION............................................................................................................................................................10
APPENDIX 1 USE SOURCE DATA .........................................................................................................................11
APPENDIX 2 FTAS SOURCE DATA........................................................................................................................12
APPENDIX 3 MONTHLY RETURN TIME SERIES (USE).............................................................................................15
APPENDIX 4 MONTHLY RETURN TIME SERIES (FTAS) ...........................................................................................17
APPENDIX 5 FORMULA AND CALCULATIONS.......................................................................................................20
APPENDIX 6 USE COMPANY PROFILE..................................................................................................................21
APPENDIX 7 FTSA COMPANY PROFILES...............................................................................................................22
INDEX ......................................................................................................................................................................24
Introduction

Recent trends in the global economy have affected almost each organisation in one way or another. This
document intends to study an investor’s approach to creating an investment portfolio which reduces risk
of loss on return by way of portfolio diversification. The approach taken here is looking at an investor
who wishes to create an investment portfolio based on two security exchanges, the London Stock
Exchange (LSE) and the Uganda Security Exchange (USE)1.

Since the two market places are geographically dispersed, that adds an extra element of diversification.
By holding a combination of instruments2 between these two market places, an investor can reduce
their exposure to individual asset risk. A portfolio will be created by choosing from six carefully3 chosen
companies from the USE and nine publicly trading companies from the FTSE-All Share index as listed
below.

1.1 USE Companies

Trading Name Industry Stock Symbol

British American Tobacco Uganda Tobacco BATU
Bank of Baroda Uganda Banking and Finance BOBU
Development Finance Company of Uganda Ltd Banking and Finance DFCU

Uganda Clays Limited Real Estate Construction UCL

Supplies
New Vision Printing and Publishing Company Ltd Printing and Publishing NVL
Stanbic Bank Uganda Banking and Finance SBU
Table 1 USE Companies and their Industries

1
The analysis presented here is based on monthly stock prices downloaded from http://www.use.or.ug and
http://finance.google.com
2
The term instruments, stocks and securities will be used interchangeably within this document.
3
USE companies are chosen based on information from Simon Waibale at the USE in Kampala. These companies would be
the best companies to give proper analysis of recent events on the USE general market place
1
1.2 FTAS Companies

Trading Name Industry Stock Symbol

DTZ Holdings Real Estate DTZ
Rightmove Holdings Real Estate RMV
Quintain Estates and Development plc Real Estate QED
Kingfisher Plc Home Improvement KGF
Balfour Beatty Engineering & Construction BBY
Spring Group plc Human Resource Supply SRG
Harvey Nash Group plc Human Resource Supply HVN
Avis Europe Plc Vehicle Rental AVE
British Telecom Group Communication Services BT-A
Table 2 FTAS Companies and their Industries

Monthly returns are determined by the following formula,

Pc − Pp
Monthly Return =
Pp
where Pc is the stock’s current month price and Pp is the stock’s previous month price

Mean returns are determined by,

1 P − Pi −1
Mean Return = ∑i i
N Pi −1
where Pi is the stock’s ith month price

2
Analysis
1.3 The USE Portfolio
In Figure 1 initial remarks can be made about which stocks to invest in within the USE. The USE All
Shared Index4 (ALSI) out performs each of the stocks but has the highest volatility5, while NVL has a
moderate rate of return and a moderate standard deviation. Another one would be DFCU which offers a
higher risk than the expected return.

Based on these figures, the efficient portfolio would be a combination of NVL and DFCU. A long term
investor may consider investing in other stocks that have not performed well on average in the past two
years depending on information available from other sources. For example UCL trades in building
materials and as the recession eases, an investor may anticipate UCL to perform better on the market.
Column 4 in Table 3 is the sensitivity, measured by beta of each of the stocks to the market – holding
other factors constant and shows that generally, each stock moves in the same direction as the market.
High beta stocks (beta > 1) mean greater volatility and are generally viewed to be more risky6.

7
Stock Mean Standard Beta (β) (%)
Return (%) Deviation (%)
BOBU 0.22 19.5 0.011
BATU 0.73 19.82 0.003
DFCU 0.84 10.48 0.023
NVL 3.38 15.48 0.071
SBU -0.41 10.55 0.036
UCL -0.82 23.39 0.036
ALSI 20.73 132.97 1

Table 3 Betas of USE stocks determined from data between Jan 2007 and Aug 2009

Most standard commercial services such as Bloomberg use 5 years worth of data to estimate beta. The
amount of data available from the USE ranges from 2007 to 2009 and Table 3 shows the values of the
market risk, beta, calculated based on the two year market data available. For these results to be more
reliable, we would need at least five years data.

Stocks that are sensitive to market conditions will have higher betas8. For example companies that deal
in tobacco (BATU) are less sensitive to market conditions than building material suppliers (UCL). A
company may attract investors even if it has high betas if it shows signs of product diversification, efforts
to increase profitability or even re-branding.

4
Defined as Market Weighted Average of the USE All Shared Index (Source: http://www.use.or.ug)
5
Volatility in this document is determined by the standard deviation of each of the stocks
6
http://en.wikipedia.org/wiki/Beta_coefficient (Retrieved: 30/08/2009)
7
Equation 3, Appendix 5
8 nd
Applied Corporate Finance, Aswath Damodaran, 2 Edition, pg 116
3
 Figure 1 –Mean returns versus Standard Deviation for USE stocks

In combining a selection from these stocks into a portfolio, an investor reduces their overall exposure to
risk of aggregate loss. The most efficient portfolio is one that increases the Sharp ratio9 by reducing the
portfolio standard deviation. Stocks that offer a higher percentage return include NVL and DFCU and
these will form that basis of our discussion.

1.3.1 The Efficient Portfolio (USE)

An even distribution of our investment between the two stocks NVL and DFCU would produce a
portfolio variance, calculated using formula 1a in Appendix 5 as

Portfolio (DFCU, NVL) variance = ½ × 169.4 + ½ × 108.41

= 138.9
Portfolio Standard Deviation = √138.9
= 11.8%

Portfolio Mean Return = ½ × 0.84 + ½ × 3.38

= 2.11%

With diversification, the risk for holding these two securities is reduced to 11.8% which is slightly above
the risk in putting all the investment into the DCFU stock but is less than the risk in investing in the NVL
stock alone. This is quite good because, NVL averages higher returns (Table 3) than DFCU and with
diversification we will be able to tap into those returns at a reduced risk level.

9 th
Principals of Corporate Finance, 9 Edition, Page 213
4
It is still not clear whether a 50%-50% investment distribution is the best diversification strategy. For us
to find out let us put some number trials here.

Using Portfolio variance10 = x12 (10.48 2 ) + x 22 (15.48) 2 + 2( x1 x2 × 10.48 × 0.68 × 15.48)

DFCU – x1 , NVL – x 2 ,

Investment Calculation Standard

Combination Deviation
70%, 30% 11.03
(0.7) 2 × (10.48 2 ) + (0.3) 2 × (15.48) 2 + 2 × (0.7 × 0.3 × 10.48 × 0.68 × 15.48)
30%, 70% 13.17
(0.3) 2 × (10.48 2 ) + (0.7) 2 × (15.48) 2 + 2 × (0.7 × 0.3 × 10.48 × 0.68 × 15.48)

Table 4 - USE investment comparison

The least risk is attainable when more is invested in DFCU than in NVL. In fact, the combination of 80% in
DFCU and 20% in NVL would reduce the portfolio standard deviation to 10.74%. A 70%-30% investment
as displayed in Table 4 would be less risky than investing 100% in NVL but slightly more risky than
investing 100% in DFCU due the lower standard deviation (11.03%). This however means that the
investor would expect a much smaller return on the portfolio [0.7 × 0.84 + 0.3 × 3.38] = 1.6%. Since the
expected return from NVL is almost 4 times as much as DFCU, a 50%-50% investment portfolio would be
a recommended efficient portfolio which will give the investor a 2.11% return with nearly the same risk
as the DFCU stock.

1.3.2 Lending and Borrowing

There is a possibility to further diversify by looking at investing in risk free instruments such as treasury
bills. Treasury bills are viewed by many to be risk free and in this section we vet the value added to the
efficient portfolio by investing in treasury bills. The average annual interest rate on the Uganda
government 364day Treasury bills was 12.48%11.

Stock Beta (β) (%) Expected Return

[β(rm – rf) + rf] (%)
BOBU 0.011 1.18
BATU 0.003 1.02
DFCU 0.023 1.42
NVL 0.071 2.37
SBU 0.036 1.67
UCL 0.036 1.67

Table 5 Estimated returns on the USE stocks based on the Capital Asset Pricing Model (CAPM)
rm is taken as 20.73% from Table 3
rf is taken as 11.51%/12 ≈ 0.96%

It is worth noting that the risk premium (rm – rf) is an estimation based on values calculated during
preparation of this document. Measuring market risk premium is not always straight forward. One way

10
Equation 3, Appendix 5
11
January 1996 to May 2009 (Source: http://www.bou.or.ug)
5
is to survey the large portfolio managers and another which we have used here is to use historic data.
The values used here only act as a guide based on well known theories to an aspiring investor but the
risk premium if viewed by an economist or other financial managers may differ.

The final recommendation would be that depending on the risk taste of the investor and their optimism
on the performance of each of the stocks in the future, they are better off investing a considerable
portion (say ≥ 50%) in the risk free treasury bills, another portion in the DFCU stock (say 25%) and the
remainder in the NVL stock. Table 6 shows a few combinations that the investor may chose from.

12
Stock (TBills – DFCU – NVL) Expected Return (%) Portfolio Standard Deviation – σp
(%)
33.3%-33.3%-33.3% 1.17 5.90
50%-25%-25% 1.54 6.49
60%-18%-22% 1.06 5.29

Table 6 Possible combination of USE stocks and Treasury Bills

And the portfolio standard deviation will be a factor of the two stocks DFCU and NVL since the standard
deviation of treasury bills is 0% but will be spread out since standard deviation is also a factor of the
number of securities.

1.4 The FTSA Portfolio

Each of the stocks in this portfolio was chosen carefully with the following in mind;
1. Industry
2. Current economic climate
3. Performance

Stock Mean Return (%) Standard Deviation (%) Beta (β) (%)
BBY 1.26 7.78 1.02
QED 4.49 43.77 4.58
DTZ 2.18 16.60 1.40
RMV 1.63 13.61 1.32
KGF -0.03 8.16 1.03
HVN 1.69 15.09 1.86
SRG 1.41 15.06 0.82
AVE 1.73 34.56 2.94
BT-A 0.07 8.33 1.23
FTSA 0.5 4.02 1.00
Table 7 Betas of FTSA stocks determined from data between Jan 2003 and Aug 2009

12
The value used here for the Treasury Bill expected return is the most recent value for May 2009, 11.51%pa. This is
equivalent to 11.51/12% or 0.96% if compounding is ignored
6
Figure 2 illustrates a rough indication of the volatility of the chosen FTAS stocks. Initial judgement
investing in the QED stock is a risky venture but is more likely to yield the investor higher returns, while
investing in the KGF stock offers on average no returns13 while being quite risky.

Figure 2 - Illustration of variation of mean returns on the FTSA

It is clear that the stocks QED, DTZ and BBY are the most efficient portfolios. Investing only in the QED
stock, would be very risky even though we expect higher returns. Thus, the investment decision if based
merely on return would favour these stocks.

1.4.1 Market Sensitivity

We aim to have a portfolio well diversified, one that will have minimum risk, in this case as closest as
possible to the market risk. A measure of the sensitivity of the stocks to the market is displayed in
Column 4 of Table 7. Each stock generally has the same movement as the market but stocks QED and
AVE are the most sensitive due to their high beta values. For instance when the market moves by one
unit, QED moves by a five-fold, while AVE moves a three-fold.

1.4.2 The Efficient Portfolio (FTAS)

The best performing stocks in Table 7 make up the efficient portfolio. These include BBY, QED, DTZ as
mentioned before. Looking at Figure 2, the investor could add RMV, SRG and HVN because these too
have a positive return with the similar volatility as the former. The efficient portfolios are those that
have the lowest portfolio standard deviation but maintain good returns. Rather than work through the
different combinations possible from these six stocks, we will chose the best performing (highest mean

13
As an investor, I would only be expecting to invest in a stock that can theoretically or mathematically offer me returns.
Exceptions could be made depending on word around the market from a trusted source for example take over rumors or if
the company is showing efforts to perform better in which case depending on their dividend policy, there could be returns
through dividends. Another reason could be market trends such that if analysts expect market trends to improve for this
stock, then as an investor, I’d consider to invest in this stock
7
return) and maximize the sharp ratio. This means that just as in section 1.3, we need to find a mix that
produces the minimal portfolio standard deviation.

Lets start with an even split of the investment between the stocks. Using the formula 1.a in Appendix 5,
where the average variance = 750.518 and the average covariance = 99.96, the portfolio standard
deviation σp = 17.9% and the portfolio would yield mean returns of [1.26/3 + 4.49/3 + 2.18/3] = 2.64%.
The risk tolerant investor will prefer to invest in QED due to its high returns but the risk averse investor
will benefit from diversification because they can earn mean returns of 2.64% at a risk much less than
QED but marginally more than DTZ.

Another consideration for diversification would be to evenly spread the investment between the six best
performing stocks from Table 7 (RMV, SRG, HVN, DTZ, QED and BBY). The average variance = 481.88 and
the average covariance = 104.91 giving a portfolio standard deviation σp = 12.95% and expected mean
return of [1.63/6 + 1.41/6 + 1.69/6 + 1.26/6 + 4.49/6 + 2.18/6] = 2.11%. This is further evidence of the
benefits of diversification as we have now been able to reduce the risk by nearly 28% and the expected
mean returns by 20%, when we hold a six stock portfolio rather than a three stock portfolio. Further
possible combinations can be made using equation 1b, Appendix 5 and the correlation coefficients in
Table 8 below.

Stock Combination Correlation Coefficients Covariance

QED,DTZ 0.38 274.15
QED,RMV 0.40 324.91
QED,HVN 0.33 219.80
QED,BBY 0.07 24.03
DTZ,RMV 0.44 120.04
DTZ,HVN 0.24 59.23
DTZ,BBY 0.01 1.70
RMV,HVN 0.47 86.39
RMV,BBY 0.21 25.55
BBY,HVN 0.41 47.72
Table 8 Correlation coefficients for FTAS stocks

1.4.3 Lending and Borrowing

We can add to this portfolio a risk free security such as treasury bills. As at 31/12/2008, annual rate of
discount of the 3 month Treasury bill was 4.34%14 or roughly 0.362% per month, or 1.1% for 3 months
ignoring the effect of quarterly compounding. Including the Treasury bill in the six stock portfolio, in
even proportion yields returns of [1.63/7 + 1.41/7 + 1.69/7 + 1.26/7 + 4.49/7 + 2.18/7 + 0.362/7] = 1.9%
at a standard deviation of 12.6%. The standard deviation has gone down by 3% but mean returns down
by 11% so this may not be worth going for since at nearly the same risk level, we are expecting lower
returns.

Yet another diversification consideration would be to put half the investment into the portfolio and the
other half into the treasury bills. The expected return = ½ × 2.11% + ½ × 0.362 = 1.27% and the standard

14
http://www.bankofengland.co.uk/
8
deviation15 ½ × 12.95 + ½ × 0 = 6.48%. This combination may be acceptable to the risk averse or risk
neutral investor because low risk level.

Stock Beta (%) Expected Return

[β(rm – rf) + rf] (%)
BBY 1.02 0.50
QED 4.58 1.00
DTZ 1.40 0.55
RMV 1.32 0.54
KGF 1.03 0.50
HVN 1.86 0.62
SRG 0.82 0.48
AVE 2.94 0.71
BT-A 1.23 0.53
Table 9 Estimated returns on the FTAS stocks based on the Capital Asset Pricing Model (CAPM)
rm is taken as 0.5% from Table 3
rf is taken as 0.36%

Column 3 in Table 9 is an estimation of returns based on the CAPM model. The calculations here are only
to serve as guide to expected returns and as mentioned in section 1.3.2 may differ from what other
professionals give.

15
Treasury Bills are risk free, as such their standard deviation is 0%
9
Conclusion

Diversification offers an investor means to offset risk attached to specific stocks by allowing the investor
to hold different securities of varying correlation and market sensitivity. In addition to this, an investor
can choose to invest in different security markets that are geographically dispersed.

Six companies from the Uganda Security Exchange – USE were chosen and nine from the London Stock
Exchange – FTAS and it was found that if an investor holds a well diversified portfolio consisting of the
best performing stocks, they are able to mix within the portfolio, very high risk stock that promise higher
return and offset that risk by also holding row risk stocks that have lower returns.

For example with the USE, DFCU and NVL are the best performing stocks and by combining them into a
50%-50% portfolio, an investor is able to offset the risk of holding just NVL within the portfolio by 24%
and mean return reduced by 34%. To a risk tolerant investor, this may not be acceptable but a risk
averse investor, the lesser the risk the better. Within the FTAS index, the stocks DTZ, BBY and QED were
chosen as the most efficient stocks. An investment evenly split between these three stocks would give
the investor a mean return of 2.64% and standard deviation of 17.9%. This shows that by holding a
mixture of highly volatile stocks (QED: σ=43.77%, μ=4.49%) and less volatile ones (BBY: σ=7.78%,
μ=1.26%, DTZ: σ=16.60%, μ=2.18%), uncertainty is greatly reduced whilst maintaining a moderate return
rate.

Introducing lending and borrowing risk free instruments such as treasury bills adds an extra level of
diversification to the investor and introduces another layer of protection from the swings in the market
place. An investor may choose to put either half of their investment into risk free instruments. Long
term investors may prefer to invest in bonds while short term investors in treasury bills.

Investors do not always base their investment decisions on mathematical projections as historic trends
are no guarantee for future trends. Investors may know more about the difference companies by
looking at their financial statements and the growth strategy the company has or their dividend policy.
Thus, an investor may choose to invest in a company’s stock even if the company is not performing well
but the investor is confident that the company will in the future. For example in 2006, the DFCU board
recommended 13.09UGX per share which represented a 43% profit after tax16.

The recommendations herein are only an illustration of how diversification can help an investor spread
risk by holding different securities based on academic theories such as the efficient portfolio line, the
capital asset pricing mode and the sharp ratio. Other theories exist such as the Arbitrage Pricing
Theory17 and the Three-Factor Model18 that can be used to measure the opportunity cost of an
investment.

16
Source: http://www.dfcugroup.com
17
Cost of Equity Capital and Risk on USE, Abubaker B. Mayanja and Keneth Legesi
18 th
Principals of Corporate Finance, 9 Edition, pg255
10
Appendix 1 USE Source Data

Stock Prices Monthly Returns (%)

Month BOBU BATU DFCU NVL SBU UCL ALSI BOBU BATU DFCU NVL SBU UCL ALSI
01/2007 1005 470 445 430 205 2300 889.56 0.00 0.00 0.00 0.00 0.00 0.00 0.00
02/2007 1090 470 460 455 145 2370 893.99 8.46 0.00 3.37 5.81 -29.27 3.04 0.50
03/2007 1215 470 475 455 160 2425 857.53 11.47 0.00 3.26 0.00 10.34 2.32 -4.08
04/2007 1695 470 470 490 170 3040 888.91 39.51 0.00 -1.05 7.69 6.25 25.36 3.66
05/2007 1715 470 450 470 155 3050 846.05 1.18 0.00 -4.26 -4.08 -8.82 0.33 -4.82
06/2007 1715 470 420 460 140 3010 846.76 0.00 0.00 -6.67 -2.13 -9.68 -1.31 0.08
07/2007 1725 470 400 450 140 3100 824.43 0.58 0.00 -4.76 -2.17 0.00 2.99 -2.64
08/2007 1750 370 400 430 140 3225 891.42 1.45 -21.28 0.00 -4.44 0.00 4.03 8.13
09/2007 1830 330 415 470 150 3700 100 4.57 -10.81 3.75 9.30 7.14 14.73 -88.78
10/2007 1920 330 485 730 190 5055 842.6 4.92 0.00 16.87 55.32 26.67 36.62 742.60
11/2007 2115 600 685 1000 205 5255 974.8 10.16 81.82 41.24 36.99 7.89 3.96 15.69
12/2007 2265 780 700 1150 230 5375 1039.93 7.09 30.00 2.19 15.00 12.20 2.28 6.68
01/2008 2445 1080 700 1450 235 6330 845.95 7.95 38.46 0.00 26.09 2.17 17.77 -18.65
02/2008 2745 1440 700 1720 240 6450 853.62 12.27 33.33 0.00 18.62 2.13 1.90 0.91
03/2008 3085 1500 805 2050 255 6720 987.61 12.39 4.17 15.00 19.19 6.25 4.19 15.70
04/2008 3730 1465 950 2345 235 10485 1051.3 20.91 -2.33 18.01 14.39 -7.84 56.03 6.45
05/2008 4000 1460 950 2645 255 10475 1067.64 7.24 -0.34 0.00 12.79 8.51 -0.10 1.55
06/2008 4240 1365 815 2615 255 10280 1095.87 6.00 -6.51 -14.21 -1.13 0.00 -1.86 2.64
07/2008 4425 1245 780 2510 250 11350 1032.11 4.36 -8.79 -4.29 -4.02 -1.96 10.41 -5.82
08/2008 5470 1220 810 2510 240 11390 981.87 23.62 -2.01 3.85 0.00 -4.00 0.35 -4.87
09/2008 5560 1100 820 2480 225 250 923.6 1.65 -9.84 1.23 -1.20 -6.25 -97.81 -5.93
10/2008 1160 985 780 1880 190 190 663.94 -79.14 -10.45 -4.88 -24.19 -15.56 -24.00 -28.11
11/2008 950 960 740 1720 150 160 785.18 -18.10 -2.54 -5.13 -8.51 -21.05 -15.79 18.26
12/2008 740 900 710 1540 150 140 779.25 -22.11 -6.25 -4.05 -10.47 0.00 -12.50 -0.76
01/2009 585 855 710 1450 145 120 725.18 -20.95 -5.00 0.00 -5.84 -3.33 -14.29 -6.94
02/2009 430 735 720 1390 150 115 597.31 -26.50 -14.04 1.41 -4.14 3.45 -4.17 -17.63
03/2009 415 700 690 1330 135 105 652.27 -3.49 -4.76 -4.17 -4.32 -10.00 -8.70 9.20
04/2009 390 630 645 1270 140 100 712.75 -6.02 -10.00 -6.52 -4.51 3.70 -4.76 9.27
05/2009 405 570 590 1150 140 100 714.06 3.85 -9.52 -8.53 -9.45 0.00 0.00 0.18
06/2009 385 485 485 1090 160 90 790.81 -4.94 -14.91 -17.80 -5.22 14.29 -10.00 10.75
07/2009 380 395 500 1030 160 80 817.53 -1.30 -18.56 3.09 -5.50 0.00 -11.11 3.38
08/2009 380 370 500 910 150 75 792.21 0.00 -6.33 0.00 -11.65 -6.25 -6.25 -3.10

11
Appendix 2 FTAS Source data

Stock Prices Monthly Returns (%)

Date BBY QED DTZ RMV KGF HVN SRG AVE BT-A FTAS BBY QED DTZ RMV KGF HVN SRG AVE BT-A FTAS
08/2009 341.4 170 98.1 508.5 214.19 46.5 61.25 36 138.8 2488.25 11.66 106.06 45.33 21.80 0.68 27.40 65.54 24.14 9.59 5.73
07/2009 305.75 82.5 67.5 417.5 212.75 36.5 37 29 126.65 2353.47 -1.05 64.18 37.76 18.78 19.66 -7.59 -3.90 33.33 24.78 8.35
06/2009 309 50.25 49 351.5 177.8 39.5 38.5 21.75 101.5 2172.08 -8.98 0.50 -10.09 -0.35 0.51 -3.66 -6.10 20.83 16.13 -3.58
05/2009 339.5 50 54.5 352.75 176.9 41 41 18 87.4 2252.64 0.67 34.23 25.29 8.54 -4.94 3.82 -3.53 9.09 -7.02 3.66
04/2009 337.25 37.25 43.5 325 186.1 39.49 42.5 16.5 94 2173.06 2.82 342.93 19.18 24.28 24.32 38.56 11.84 279.31 20.20 9.52
03/2009 328 8.41 36.5 261.5 149.7 28.5 38 4.35 78.2 1984.17 3.14 -66.36 -0.68 16.22 18.34 -8.06 4.11 19.83 -13.78 2.82
02/2009 318 25 36.75 225 126.5 31 36.5 3.63 90.7 1929.75 -14.40 1.01 45.54 33.53 -9.06 1.64 8.15 14.51 -13.54 -7.18
01/2009 371.5 24.75 25.25 168.5 139.1 30.5 33.75 3.17 104.9 2078.92 12.83 -32.65 -10.62 -4.26 3.04 3.39 32.35 -19.34 -22.41 -5.90
12/2008 329.25 36.75 28.25 176 135 29.5 25.5 3.93 135.2 2209.29 7.60 0.68 -19.29 -7.49 12.97 6.81 27.50 -21.40 0.00 3.53
11/2008 306 36.5 35 190.25 119.5 27.62 20 5 135.2 2133.99 22.89 -56.93 -37.50 -1.17 4.82 25.55 -40.74 -25.37 17.46 -2.28
10/2008 249 84.75 56 192.5 114 22 33.75 6.7 115.1 2183.69 -17.00 -57.89 -55.91 -24.06 -13.44 -29.03 -13.46 -29.47 -28.55 -12.08
09/2008 300 201.25 127 253.5 131.7 31 39 9.5 161.1 2483.67 -27.27 6.20 27.00 -17.96 -1.35 -16.01 0.00 -13.64 -6.55 -13.42
08/2008 412.5 189.5 100 309 133.5 36.91 39 11 172.4 2868.69 3.90 18.62 -21.57 4.04 12.75 2.53 4.00 -18.52 -0.86 4.35
07/2008 397 159.75 127.5 297 118.4 36 37.5 13.5 173.9 2749.21 -6.59 -15.14 -36.01 10.82 5.43 5.79 -5.06 -37.21 -13.01 -3.73
06/2008 425 188.25 199.25 268 112.3 34.03 39.5 21.5 199.9 2855.69 -0.87 -47.27 1.53 -23.76 -18.15 -11.03 -14.59 -14.00 -9.95 -7.35
05/2008 428.75 357 196.25 351.5 137.2 38.25 46.25 25 222 3082.26 -2.67 -12.23 -8.72 -16.21 3.31 -1.92 3.93 5.26 -0.34 -0.57
04/2008 440.5 406.75 215 419.5 132.8 39 44.5 23.75 222.75 3099.94 -6.48 -9.76 -0.46 -14.26 0.61 5.41 -7.29 -6.86 2.53 5.91
03/2008 471 450.75 216 489.25 132 37 48 25.5 217.25 2927.05 5.55 1.92 -6.29 -2.54 0.69 -26.00 -4.00 -5.56 -4.30 -2.85
02/2008 446.25 442.25 230.5 502 131.1 50 50 27 227 3013.02 5.56 -11.02 -4.36 15.14 -9.96 11.11 -7.41 -25.00 -12.36 0.43
01/2008 422.75 497 241 436 145.6 45 54 36 259 3000.1 -14.98 -3.50 -7.31 -6.03 0.00 -16.67 10.77 -11.11 -5.04 -8.72
12/2007 497.25 515 260 464 145.6 54 48.75 40.5 272.75 3286.67 1.90 -13.95 -20.25 -4.33 -4.40 -2.70 4.84 40.87 -4.88 0.18
11/2007 488 598.5 326 485 152.3 55.5 46.5 28.75 286.75 3280.87 -1.41 -2.60 -19.51 -18.35 -22.81 -16.54 -32.12 -28.13 -12.04 -5.02
10/2007 495 614.5 405 594 197.3 66.5 68.5 40 326 3454.12 4.32 -16.96 -14.24 14.89 10.35 -8.90 2.24 11.11 6.19 4.14
09/2007 474.5 740 472.25 517 178.8 73 67 36 307 3316.89 0.21 -8.53 -12.63 -11.32 -14.24 4.29 -4.96 -25.00 -2.77 1.73
08/2007 473.5 809 540.5 583 208.5 70 70.5 48 315.75 3260.48 8.66 -12.54 8.97 0.43 -2.23 -11.22 -12.42 4.92 0.24 -0.87
07/2007 435.75 925 496 580.5 213.25 78.85 80.5 45.75 315 3289.12 -1.64 14.13 -4.62 -7.56 -5.85 -13.11 11.81 -11.59 -5.26 -3.38

12
06/2007 443 810.5 520 628 226.5 90.75 72 51.75 332.5 3404.14 -3.70 -0.55 -9.88 2.07 -8.76 17.40 4.73 -13.39 0.91 -1.01
05/2007 460 815 577 615.25 248.25 77.3 68.75 59.75 329.5 3438.7 -1.92 -4.17 -3.19 20.64 -8.90 -3.38 2.23 -14.95 4.19 2.48
04/2007 469 850.5 596 510 272.5 80 67.25 70.25 316.25 3355.6 -1.68 -5.03 -9.97 2.00 -2.07 5.26 7.60 -0.35 4.12 2.20
03/2007 477 895.5 662 500 278.25 76 62.5 70.5 303.75 3283.21 5.18 -0.50 -2.65 5.37 10.64 -1.43 -4.58 -1.40 2.70 2.66
02/2007 453.5 900 680 474.5 251.5 77.1 65.5 71.5 295.75 3198.28 8.82 3.45 -2.79 -0.11 5.12 1.45 10.08 -8.92 -3.35 -0.42
01/2007 416.75 870 699.5 475 239.25 76 59.5 78.5 306 3211.84 -5.93 1.75 -16.23 20.25 0.31 6.29 -13.14 -3.98 1.49 -0.30
12/2006 443 855 835 395 238.5 71.5 68.5 81.75 301.5 3221.42 6.49 3.64 12.61 6.76 -1.85 21.60 4.98 11.22 6.07 3.26
11/2006 416 825 741.5 370 243 58.8 65.25 73.5 284.25 3119.85 2.65 9.56 18.07 5.71 -7.69 -11.58 3.16 13.08 2.16 -0.66
10/2006 405.25 753 628 350 263.25 66.5 63.25 65 278.25 3140.47 -1.58 7.57 -3.98 0.65 7.34 2.31 27.78 2.36 3.82 2.95
09/2006 411.75 700 654 347.75 245.25 65 49.5 63.5 268 3050.44 10.31 7.03 6.60 14.39 3.92 8.33 -10.00 -2.31 8.72 1.43
08/2006 373.25 654 613.5 304 236 60 55 65 246.5 3007.51 4.19 -4.80 -9.78 6.76 -3.48 2.83 28.65 -9.09 3.68 0.11
07/2006 358.25 687 680 284.75 244.5 58.35 42.75 71.5 237.75 3004.28 4.29 6.35 0.00 -19.45 2.52 -2.99 8.92 -5.30 -0.63 1.24
06/2006 343.5 646 680 353.5 238.5 60.15 39.25 75.5 239.25 2967.58 2.38 11.28 -4.23 3.06 5.30 0.25 -1.88 3.07 2.13 1.74
05/2006 335.5 580.5 710 343 226.5 60 40 73.25 234.25 2916.85 -6.55 -6.22 10.42 -3.92 0.55 -8.40 -8.57 3.53 6.84 -5.12
04/2006 359 619 643 357 225.25 65.5 43.75 70.75 219.25 3074.26 -3.49 -8.97 -2.43 -6.36 -5.95 -5.48 -17.45 -0.70 -1.24 0.86
03/2006 372 680 659 381.25 239.5 69.3 53 71.25 222 3047.96 -0.73 -1.45 18.53 4.93 28.33 -7.42 -11.21 7.90 3.11
02/2006 374.75 690 556 228.25 54 57.25 80.25 205.75 2956.12 2.53 9.52 8.01 -3.89 19.21 -3.78 4.90 0.12 0.94
01/2006 365.5 630 514.75 237.5 45.3 59.5 76.5 205.5 2928.56 2.67 0.24 15.74 0.11 -0.68 -4.03 9.29 -7.74 2.86
12/2005 356 628.5 444.75 237.25 45.61 62 70 222.75 2847.02 5.95 5.99 7.04 5.44 -0.20 3.33 0.72 4.33 3.87
11/2005 336 593 415.5 225 45.7 60 69.5 213.5 2741.05 10.25 9.31 4.27 6.13 -2.25 0.84 4.12 0.23 2.88
10/2005 304.75 542.5 398.5 212 46.75 59.5 66.75 213 2664.4 -6.95 -6.79 18.69 -1.85 -15.00 0.00 5.53 -4.16 -2.96
09/2005 327.5 582 335.75 216 55 59.5 63.25 222.25 2745.79 -1.13 0.87 16.18 -14.03 -7.49 -7.39 27.14 3.13 3.26
08/2005 331.25 577 289 251.25 59.45 64.25 49.75 215.5 2659.21 -4.88 3.31 14.23 -2.52 23.29 20.66 -2.93 -5.27 0.55
07/2005 348.25 558.5 253 257.75 48.22 53.25 51.25 227.5 2644.75 5.29 5.98 6.75 4.78 -15.08 -22.26 -17.34 -1.09 3.30
06/2005 330.75 527 237 246 56.78 68.5 62 230 2560.17 2.32 -2.68 7.73 -4.28 8.19 -21.46 -6.06 7.85 3.09
05/2005 323.25 541.5 220 257 52.48 87.22 66 213.25 2483.35 6.16 6.39 9.45 4.68 -2.22 -12.78 -6.71 6.76 3.60
04/2005 304.5 509 201 245.5 53.67 100 70.75 199.75 2397.05 -2.56 -4.50 -2.90 -14.98 -28.44 -1.96 10.55 -2.80 -2.47
03/2005 312.5 533 207 288.75 75 102 64 205.5 2457.73 -2.57 -2.38 -5.61 -0.94 -11.76 -1.11 6.67 -1.44 -1.51
02/2005 320.75 546 219.3 291.5 85 103.15 60 208.5 2495.46 -2.21 -3.87 0.48 -4.43 -6.76 1.88 18.81 0.24 2.22
01/2005 328 568 218.25 305 91.16 101.25 50.5 208 2441.22 4.04 -1.39 8.38 -1.53 -0.75 12.25 -6.05 2.46 1.26
12/2004 315.25 576 201.38 309.75 91.85 90.2 53.75 203 2410.75 4.56 21.78 5.99 7.55 14.81 -5.05 -16.67 4.37 2.79
11/2004 301.5 473 190 288 80 95 64.5 194.5 2345.21 11.15 3.11 0.32 -4.71 5.26 -5.94 1.98 4.71 2.07

13
10/2004 271.25 458.75 189.39 302.25 76 101 63.25 185.75 2297.66 -2.60 0.60 12.73 -1.95 -12.64 -6.48 -8.33 3.34 1.14
09/2004 278.5 456 168 308.25 87 108 69 179.75 2271.67 4.90 0.22 2.64 11.28 16.00 -4.42 -16.36 -1.78 2.60
08/2004 265.5 455 163.68 277 75 113 82.5 183 2214.19 0.19 -1.89 -4.56 -2.46 8.70 7.62 -13.84 -3.05 1.00
07/2004 265 463.75 171.5 284 69 105 95.75 188.75 2192.22 -0.19 3.75 8.20 -0.79 -6.76 -9.48 -7.93 -4.91 -1.64
06/2004 265.5 447 158.5 286.25 74 116 104 198.5 2228.67 6.31 12.45 2.09 0.09 6.86 3.57 10.64 8.47 1.22
05/2004 249.75 397.5 155.25 286 69.25 112 94 183 2201.81 -0.70 -1.97 -4.49 0.97 -13.44 -3.24 -4.08 2.52 -1.59
04/2004 251.5 405.5 162.55 283.25 80 115.75 98 178.5 2237.34 -3.08 -4.59 6.24 -1.82 -8.05 -0.22 3.98 0.85 1.84
03/2004 259.5 425 153 288.5 87 116 94.25 177 2196.97 5.06 10.75 -3.47 -3.67 -14.81 -19.44 0.27 0.14 -2.07
02/2004 247 383.75 158.5 299.5 102.13 144 94 176.75 2243.41 7.27 12.87 7.82 7.83 6.39 21.01 -7.16 0.57 2.57
01/2004 230.25 340 147 277.75 96 119 101.25 175.75 2187.1 5.38 -3.89 9.46 -0.27 25.95 5.31 6.58 -6.64 -0.92
12/2003 218.5 353.75 134.3 278.5 76.22 113 95 188.25 2207.38 0.69 4.04 9.19 1.00 -2.90 -1.09 -12.04 8.35 2.83
11/2003 217 340 123 275.75 78.5 114.25 108 173.75 2146.72 13.32 5.32 0.00 -2.39 6.08 -4.79 -2.70 -6.33 1.00
10/2003 191.5 322.82 123 282.5 74 120 111 185.5 2125.37 -5.32 5.50 12.33 8.24 26.50 37.93 8.56 3.06 4.82
09/2003 202.25 306 109.5 261 58.5 87 102.25 180 2027.72 -6.26 -4.08 1.44 -4.04 -2.50 -3.33 -11.85 -2.17 -1.79
08/2003 215.75 319 107.95 272 60 90 116 184 2064.74 14.76 1.59 -0.05 -3.03 39.53 13.92 16.00 -6.00 0.92
07/2003 188 314 108 280.5 43 79 100 195.75 2045.82 -2.59 -0.32 35.85 32.31 17.56 6.38 -3.93 3.78
06/2003 193 315 79.5 32.5 67.2 94 203.75 1971.26 -1.53 18.39 1.92 -4.41 13.90 4.44 5.84 0.12
05/2003 196 266.08 78 34 59 90 192.5 1968.83 9.34 9.66 13.04 -5.56 13.46 4.96 7.39 4.09
04/2003 179.25 242.65 69 36 52 85.75 179.25 1891.5 21.94 6.66 32.69 30.91 6.12 -15.10 14.17 8.97
03/2003 147 227.5 52 27.5 49 101 157 1735.72 -7.98 -6.38 4.00 -24.14 0.00 11.60 -3.98 -1.33
02/2003 159.75 243 50 36.25 49 90.5 163.5 1759.08 -1.39 -1.22 -10.95 25.00 3.44 -3.72 -5.76 2.14
01/2003 162 246 56.15 29 47.37 94 173.5 1722.28 -9.05

14
 Ja Ja

-30
-20
-10
0
10
20
30
40
50
-100
-80
-60
-40
-20
0
20
40
60
n- n-
07 07
M M
ar ar
-0 -0
7 7
M M
ay ay
-0 -0
7 7
Appendix 3

Ju Ju
l-0 l-0
7 7
Se Se
p- p-
07 07
N N
ov ov
-0 -0
7 7
Ja Ja
n- n-
08 08
M M
ar ar
-0 -0
8 8
M M
ay ay
-0 -0
8 8
Ju Ju
l-0 l-0
8 8
Se Se
p- p-
08 08
N N
ov ov
-0 -0
8 8
Ja Time Series of DFCU Monthly Returns Ja
Time Series of BOBU Monthly Returns

n- n-
09 09
M M
ar ar
-0 -0
9 M 9
M ay
ay
-0 -0
9 9
Ju Ju
l-0 l-0
9 9
Monthly return time series (USE)

15
Ja Ja

-30
-20
-10
0
10
20
30
40
50
60
-40
-20
0
20
40
60
80
100

n- n-
07 07
M M
ar ar
-0 -0
7 7
M M
ay ay
-0 -0
7 7
Ju Ju
l-0 l-0
7 7
Se Se
p- p-
07 07
N N
ov ov
-0 -0
7 7
Ja Ja
n- n-
08 08
M M
ar ar
-0 -0
8 8
M M
ay ay
-0 -0
8 8
Ju Ju
l-0 l-0
8 8
Se Se
p- p-
08 08
N N
ov ov
-0 -0
8 8
Time Series of NVL Monthly Returns

Ja Ja
Time Series of BATU Monthly Returns

n- n-
09 09
M M
ar ar
-0 -0
9 9
M M
ay ay
-0 -0
9 9
Ju Ju
l-0 l-0
9 9
 Ja Ja

-200
-100
0
100
200
300
400
500
600
700
800
-40
-30
-20
-10
0
10
20
30

n- n-
07 07
M M
ar ar
-0 -0
7 7
M M
ay ay
-0 -0
7 7
Ju Ju
l-0 l-0
7 7
Se Se
p- p-
07 07
N N
ov ov
-0 -0
7 7
Ja Ja
n- n-
08 08
M M
ar ar
-0 -0
8 8
M M
ay ay
-0 -0
8 8
Ju Ju
l-0 l-0
8 8
Observation #

Se Se
p- p-
08 08
N N
ov ov
-0 -0
8 8
Ja
Time Series of SBU Monthly Returns

Ja
Time Series of ALSI Monthly Returns

n- n-
09 09
M M
ar ar
-0 -0
9 9
M M
ay ay
-0 -0
9 9
Ju Ju
l-0 l-0
9 9

16
Ja
-120
-100
-80
-60
-40
-20
0
20
40
60
80

n-
07
M
ar
-0
7
M
ay
-0
7
Ju
l-0
7
Se
p-
07
N
ov
-0
7
Ja
n-
08
M
ar
-0
8
M
ay
-0
8
Ju
l-0
8
Observation #

Se
p-
08
N
ov
-0
8
Time Series of UCL Monthly Returns

Ja
n-
09
M
ar
-0
9
M
ay
-0
9
Ju
l-0
9
Appendix 4 Monthly Return Time Series (FTAS)
Time Series of BBY/FTAS Montly Returns Time Series of QED/FTAS Montly Returns

30.00 400.00
350.00
20.00 300.00

10.00 250.00
200.00
0.00 150.00
100.00
-10.00
50.00

-20.00 0.00
-50.00
-30.00 -100.00
Au 3

04

05

Au 6

07

08

Au 9
03

04

05

06

07

08

09

Au 3

04

Au 5

Au 6

Au 7

08

Au 9
03

04

05

06

07

08

09
0

0
b-

b-

b-

b-

b-

b-

b-
g-

g-

g-

g-

g-

g-

g-

b-

b-

b-

b-

b-

b-

b-
g-

g-

g-

g-

g-

g-

g-
Fe

Fe

Fe

Fe

Fe

Fe

Fe
Au

Au

Au

Au

Fe

Fe

Fe

Fe

Fe

Fe

Fe
Au

Au
Time Series of DTZ/FTAS Montly Returns Time Series of RMV/FTAS Montly Returns

60.00 40.00

40.00 30.00

20.00 20.00

0.00 10.00

-20.00 0.00

-40.00 -10.00

-60.00 -20.00

-80.00 -30.00
03

04

05

06

07

08

09
03

04

05

06

07

08

09

03

04

05

Au 6

07

08

09
03

04

05

06

07

08

09
0
b-

b-

b-

b-

b-

b-

b-
g-

g-

g-

g-

g-

g-

g-

b-

b-

b-

b-

b-

b-

b-
g-

g-

g-

g-

g-

g-

g-
Fe

Fe

Fe

Fe

Fe

Fe

Fe
Au

Au

Au

Au

Au

Au

Au

Fe

Fe

Fe

Fe

Fe

Fe

Fe
Au

Au

Au

Au

Au

Au
17
 Fe Fe
b- b-

-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00

-60.00
-40.00
-20.00
0.00
20.00
40.00
60.00
80.00
03
Au 3 Au
g- g-
0 03
Fe 3 Fe
b- b-
0 04
Au 4 Au
g- g-
0 04
Fe 4 Fe
b- b-
0 05
Au 5 Au
g- g-
0 05
Fe 5 Fe
b- b-
0 06
Au 6 Au
g- g-
0 06
Fe 6 Fe
b- b-
0 07
Au 7 Au
g- g-
0 07
Fe 7 Fe
b- b-
0 08
Time Series of SRG/FTAS Montly Returns
Time Series of KGF/FTAS Montly Returns

Au 8 Au
g- g-
0 08
Fe 8 Fe
b-
0 b-
09
Au 9 Au
g- g-
09 09

18
Fe
Fe b-
-40.00
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
50.00

b- 03
0
-100.00
-50.00
0.00
50.00
100.00
150.00
200.00
250.00
300.00

Au
Au 3 g-
g- 03
0 Fe
Fe 3 b-
b- 04
0 Au
Au 4 g-
g- 04
0 Fe
Fe 4 b-
b- 05
0 Au
Au 5 g-
g- 05
0
Fe 5 Fe
b- b-
0 06
Au 6 Au
g- g-
0 06
Fe 6 Fe
b- b-
0 07
Au 7 Au
g- g-
0 07
Fe 7 Fe
b- b-
0 08
Time Series of AVE/FTAS Montly Returns
Time Series of HVN/FTAS Montly Returns

Au 8 Au
g- g-
0 08
Fe 8 Fe
b- b-
0 09
Au 9 Au
g- g-
09 09
 Fe
b-
0

-40.00
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00

Au 3
g-
0
Fe 3
b-
0
Au 4
g-
0
Fe 4
b-
0
Au 5
g-
0
Fe 5
b-
0
Au 6
g-
0
Fe 6
b-
0
Au 7
g-
0
Fe 7
b-
0
Time Series of BT-A/FTAS Montly Returns

Au 8
g-
0
Fe 8
b-
0
Au 9
g-
09

19
Appendix 5 Formula and Calculations

1. Portfolio Variance (assets i and j)

1  1
a. σ p2 = × σ 2 + 1 −  × Cov(i, j ) , when equal investments are made in N stocks
N  N 
b. σ 2p = ∑ ∑ wi w j σ i σ j ρ jj
i j

COVAR ( AVERAGE ( MARKET ), AVERAGE ( STOCK ))

2. , where AVERAGE, COVAR and VARP are Microsoft Excel functions
VARP ( MARKET )
3. Portfolio variance formula = x12σ 12 + x 22σ 22 + 2( x1 x 2 ρ12σ 1σ 2 ) , between two stocks

20
Appendix 6 USE Company Profile19

Company Profile
British American Tobacco Uganda British American Tobacco Limited is a Uganda-based company. The Company is engaged in the purchase, processing and
sale of tobacco products. The Company operates in two business segments: cigarettes and tobacco leaf. Cigarettes
segment includes import and distribution of cigarette brands in the domestic market. Tobacco leaf segment includes
purchase, processing and export of packed tobacco leaf.
Bank of Baroda Uganda Bank of Baroda (Uganda) Limited is a subsidiary of Bank of Baroda Plc, India. The Bank is engaged in providing commercial
banking services. Its subsidiary include Baroda Capital Markets (Uganda) Limited.
Development Finance Company DFCU Group is a Uganda-based company active in the finance sector. The Company provides products and services catering
of Uganda Ltd for customers ranging from individuals to sole proprietors, partnerships, small to medium-sized enterprises and large
corporations. It operates under two main business streams: Consumer Banking, and Development and Institutional
Banking. The Consumer Banking portfolio includes home, salary and land purchase loans; savings, investment, fixed deposit
and current accounts; vehicle and equipment leasing, as well as money transfers.
Uganda Clays Limited Uganda Clays Limited is a manufacturer of baked clay building products. The Company uses Italian-made heavy clay
processing machinery to manufacture a variety of building materials from clay excavated using surface mining techniques.
The Company’s products can be classified into nine categories and include roofing tiles, bricks, interlocking and corner
blocks, partitioning blocks, decorative gilles, ventilators, floor tiles, pipes and cable covers. Of the Company’s products,
roofing tiles and bricks account for the largest portion of revenues generated from sales contributing 53% and 11%
respectively.
New Vision Printing New Vision Printing and Publishing Limited (NVPPCL) is a multimedia publishing house, with interests in newspapers,
and Publishing Company Ltd magazines, broadcasting, Internet publishing and commercial printing. It also provides advertising and circulation
distribution services. The newspapers published by the Company include New Vision, Sunday Vision, Bukedde, Orumuri,
Rupiny and Etop. The magazines published by the Company include Premiership, City Beat, Bride & Groom, Flair FOR HER
and Secondary Schools Directory.
Stanbic Bank Uganda Stanbic Bank Uganda Limited (the Bank) is engaged in the business of banking and the provision of related financial
services. It provides retail, corporate and investment banking sevices in Uganda. The Bank is controlled by Stanbic Africa
Holdings Limited. Its ultimate holding company is Standard Bank Group Limited. At December 31, 2007, the Bank was
organized into two main business segments: personal and business banking, and corporate and investment banking.

19
Source: http://finance.google.com
21
Appendix 7 FTSA Company Profiles20

Company Profile
DTZ Holdings DTZ Holdings plc is the holding company of a group of companies acting as national and international property advisers and
consultants. It operates five service lines. The Capital Markets business provides advice and brokerage in direct and indirect
investments; equity finance and structured debt; mergers and acquisition advisory and joint ventures, and investment and asset
management. The Valuation business provides valuation, appraisal and due diligence advisory services. The Occupational &
Development Markets business provides advice and transaction support to occupiers, landlords and developers across the office,
industrial, logistics and retail sectors.
Rightmove Holdings Rightmove Group Plc, formerly Rightmove PLC, operates in the United Kingdom residential property industry. The Company's
principal business is the operation of the Rightmove.co.uk Website, which is a residential property Website. Its customers include
estate agents, letting agents, new homes developers and overseas homes agents, who pay fees for the right to display properties on
the Rightmove Website, which provides home hunters with property details to search.
Quintain Estates Quintain Estates and Development plc is a United Kingdom-based property company, which consists of fund management,
and Development plc investment and urban regeneration business. Its urban regeneration business is mainly in London and spans the commercial, retail
and residential property sectors. During the fiscal year ended March 31, 2009 (fiscal 2009), the Company owned 25.4% interest in
Quercus Healthcare Property Unit Trust (Quercus), which is a healthcare property fund. The Company acts as an asset manager for
Quercus.
Kingfisher Plc Kingfisher plc is an international home improvement retailer offering home improvement products through a network of retail sites,
located mainly in the United Kingdom, Europe and Asia. As of February 2, 2008, the Company operated over 780 stores in nine
countries across Europe and Asia, including the United Kingdom, France, Poland, Italy, Turkey and China. The Company principally
operates through its main retail brands B&Q, Castorama, Brico Depot and Screwfix Direct.
Balfour Beatty Balfour Beatty plc is focused on engineering and construction, professional and support services, and investments. The Company
focuses on the construction, equipping, maintenance, management and renewal of rail assets and systems. It has a presence
throughout the United Kingdom, Germany and Italy and projects in Sweden, Norway, Denmark, Spain, Austria, Switzerland, China
and Malaysia, as well as its United States rail business.
Spring Group plc Spring Group plc is principally engaged in the provision of recruitment, staffing and related services. The Company operates in three
segments: Professional Staffing, Managed Solutions and General Staffing. Professional Staffing and Managed Solutions includes the
provision of information technology (IT) and telecoms specialists to large national and international organizations, as well as to
smaller regional organizations, it also includes permanent placements and provision of teams to undertake IT and telecoms testing
services.

20
Source: http://finance.google.com
22
Company Profile
Harvey Nash Group plc Harvey Nash Group plc is a global professional recruitment and outsourcing consultancy. During the fiscal year ended January 31,
2009, the principal activity of the Company was the provision of professional recruitment and outsourcing services, in particular
providing information technology professionals for permanent and contract positions globally.
Avis Europe Plc Avis Europe plc is an international vehicle rental services company. Under the Avis and Budget brands, the Company operates more
than 3,900 corporate and licensee locations in Europe, Africa, the Middle East and Asia. During the year ended December 31, 200,
the Company had an average fleet of 117,000 vehicles, and completed over eight million rental transactions. The Company has
commercial ties with Avis Budget Group, Inc, which owns the global rights to the two brands, as well as the Wizard rental and
reservation system.
British Telecom Group BT Group plc (BT Group) is a communications services company. It operates in more than 170 countries worldwide. The Company’s
principal activities include the provision of networked information technology (IT) services; local, national and international
telecommunications services; broadband and Internet products and services, and converged fixed/mobile products and services. The
Company is organized into four customer-facing lines of business: BT Global Services, BT Retail, BT Wholesale and Openreach, which
are supported by two internal functional units: BT Operate and BT Design.

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Index
A N
Arbitrage Pricing Theory, 10 New Vision Printing and Publishing Company, 1
Avis Europe, 2, 23
O
B
opportunity cost, 10
Balfour Beatty, 2, 22
Bank of Baroda Uganda, 1, 21
Beta, 3, 5, 6, 9
P
bonds, 10 portfolio variance, 4
British American Tobacco Uganda, 1, 21
British Telecom Group, 2, 23
Q
C Quintain Estates and Development, 2, 22

Capital Asset Pricing Model, 5, 9

compounding, 6, 8
R
Correlation coefficients, 8 Rightmove Holdings, 2, 22
risk averse, 8
D risk premium, 5
risk tolerant, 8
Development Finance Company of Uganda, 1
dividends, 7
DTZ Holdings, 2, 22
S
securities, 4, 10
E Sharp ratio, 4
Spring Group, 2, 22
efficient portfolio, 3, 4, 5, 7, 10 Stanbic Bank Uganda, 1, 21
expected mean, 8
T
H
Three-Factor Model, 10
Harvey Nash Group, 2, 23 Treasury bills, 5

I U
instruments, 1, 5, 10 Uganda Clays Limited, 1, 21

K V
Kingfisher, 2, 22 variance. See portfolio variance
volatility, 3, 7
M
mean return, 8, 10

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