By Godfrey Kenneth Gobba
If you want to make money during the oil boom, you had better start casting your nets right now or else you might end up watching everyone else become a billionaire while you scratch your head wondering where you went wrong.
Have you thought about how you will get a piece of that oil action? If you haven’t, you had better wake up because now is the time to start positioning yourself.
The general consensus is that unless you have deep pockets to start up an oil related business or know someone worth knowing or work for an oil company, it will be very difficult for an ordinary person to taste oil money.
While this is very true, it is not entirely true because there is one affordable and easily accessible way that an ordinary Ugandan like you and me can taste oil money and that is by participating in Uganda’s Stock markets.
Oil And The Stock Market
One thing is for sure. Oil money is definitely going to find its way into the Stock Market and this ought to increase both stock prices and dividend yields.
We currently have 16 listed companies on the Uganda Securities Exchange (USE). Five of these are banks, two are insurance companies, two are media houses, three are lifestyle companies and one powers up the country.
Aren’t these the same banks that will be financing all those mega oil deals and projects? Aren’t these the same insurance companies that will be providing all the required insurance cover and aren’t these the same media houses that will be running all those expensive oil related advertising campaigns?
Aren’t these the same lifestyle companies that stand to reap big from a cash rich middle class addicted to shopping and getting wasted? And who is going to be providing all the power required to run an oil country?
The companies that are currently selling their shares to the public on the USE are already strategically positioned to mint money during the oil boom.
So what does a smart Ugandan have to do? All you have to do to make oil money is to position yourself as a shareholder in the companies that are bound to run the oil economy.
As these companies make money during the oil boom, their stock prices should grow and they should be able to pay out higher dividends. This will enable you to make money either by holding your stock holdings for dividend income or by selling your shares at higher prices for mega profits.
You do not necessarily need a lot of money to start positioning yourself in the Stock Market. You can start buying shares with as little as Shs50,000 only.
You can start investing small amounts of money regularly and eventually accumulate a large chunk of shares over the years.
Not having the resources to start up your own petroleum dealership should not be an excuse for you to stay with the have not’s during a time of prosperity in the nation.
You can be a part of the have’s by becoming a shareholder in the companies that are already strategically positioned to make oil money.
If you can’t beat them, just join them. You might not make as much money as the guy with his own petroleum empire, but at least you will get a piece of the action.
Lastly, these are the weird thoughts of a really weird guy and they should not be taken explicitly as investment advice.
But hey, just think about it.
The author is CEO, African Investor Academy