T-bonds auction set to jump-start Uganda Securities Exchange

The first auctioning and settlement of treasury bonds on the Uganda Securities Exchange (USE) in the new fiscal year has jump-started activity on the bourse. This critical development comes at a time when the USE is gearing up for the listing of MTN Uganda, a move that is expected to further boost trading volumes and liquidity on the exchange. Paul Bwiso, CEO of the USE, shared insights on these recent developments and the outlook for the exchange in an interview with CNBC Africa. One of the key themes discussed in the interview was the potential growth opportunities for investors in the capital markets. Bwiso highlighted the importance of public engagement and participation in the capital markets, especially in terms of savings and investments. As the exchange prepares for the listing of MTN Uganda, there is optimism about the new opportunities that will arise for investors to diversify their portfolios and benefit from the growth of the exchange. Three key points emerged from the interview. Firstly, Bwiso emphasized the significance of the recent treasury bonds auction in stimulating trading activity on the USE. The successful auction signals a positive start to the new fiscal year and sets the stage for increased investor interest in government securities. This development is crucial for enhancing liquidity and deepening the capital markets in Uganda. Secondly, the discussion turned to the share buyback undertaken by Nation Media Group (NMG), a notable event in the region. While Bwiso acknowledged the potential for other companies to follow suit, he highlighted that the decision to engage in share buybacks would be sector-based and dependent on the business outlook post-COVID. This trend is likely to be adopted by companies with public interest and active participation from pension funds. Lastly, the conversation touched on the performance of specific counters on the exchange. Bwiso noted challenges within the banking sector, such as reduced activity in private sector credit growth due to the impact of the pandemic. Despite uncertainties in certain sectors, Bwiso suggested a cautious approach towards investing in counters like Umeme and Quality Chemicals, advising investors to assess the medium to long-term outlook before making decisions. In conclusion, Bwiso highlighted the need for investors to monitor the half-year performance of companies for better indicators of future investment decisions. As the USE continues to evolve and expand its offerings, it remains poised for growth and increased investor participation. The upcoming listing of MTN Uganda and the successful treasury bonds auction are positive signs of a vibrant and dynamic capital market in Uganda.