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Public to critique master plan for Capital Markets

Keith Kalyegira, the Capital Markets Authority (CMA) chief executive officer, is on a mission to fulfill the authority’s 10-year development master plan through facilitating access to alternative financing in order to reduce dependency on bank financing as well as to improve efficiency within the capital markets ecosystem.

Therefore, the CMA week that rolls off today at the Constitution Square is a timely moment to enlighten stakeholders about formal savings and investment opportunities within the economy, writes JUSTUS LYATUU.

In 2015, CMA developed a 10-year development master plan whose vision is to position Uganda’s capital markets within the frontier market as well as attract more international capital to meet financing needs for both government and the private sectors.

L-R: Keith Kalyegira, the CMA chief executive officer, former CMA board chair Grace Kavuma, BoU deputy governor Louis Kasekende and Matia Kasaija, the Finance minister

The Capital Markets week kicks off today at Constitution Square under the theme How can Ugandans save, invest and create wealth in Uganda’s Capital Markets? Entrance is free.

The master plan’s phased implementation is to strengthen capacity, develop tiered streamlined issuance requirements and improve awareness by 2019. On that background, CMA week aims to educate the public on its operations as well as get the public acquainted with the sector.

“As CMA, we are organizing a Capital Markets Week for anyone who wants to know more about capital markets, what they do, opportunities existing for savers and investors and issuance of money (raising capital),” Kalyegira says. “We will talk about available savings options; we believe individuals can go directly to buy shares after getting advice from brokers [or] invest in government bonds through collective investment schemes rather than having the challenge of where to invest.”

Uganda currently has 16 companies listed on the Uganda Securities Exchange (USE) with only eight locally owned. So, this will be an opportunity for the public to see and assess their performance.

Finance minister Matia Kasaija weighed in on the initiative and noted that government is committed to deepening and broadening the financial sector.

“The implementation of this plan hinges on support from different parties hence the need for a concerted, multi-sectoral effort to ensure the realization of the vision and goals set out in the plan. As the key policy body for this document, the ministry of Finance, Planning and Economic Development will ensure that the recommendations are given priority by the various implementing agencies and effective monitoring will be carried out during the period,” he said.

“The ministry further commits to support the growth of capital markets and I, therefore, implore all Ugandans to embrace this development and actively participate in this growth.”

Meanwhile, Kalyegira welcomes the move by government to enforce mandatory listing of telecommunication companies on the USE. He explains that listing the companies will give Ugandans a chance to own the successes of the companies especially because the telecom companies have many subscribers and big revenue.

“Why can’t some of these people buy shares in companies like MTN or Airtel? The success of these companies have been in the back of Ugandan society; so, why can’t they give back to society?” he says.

Last week, Kasaija announced that he is going to table a memo to cabinet this week which seeks to make telecom companies listed, thereby compelling the companies to sell shares to the public.

Kalyegira said Ugandans should make noise in order to be allowed to be part of these telecommunication companies.

“Many Ugandans don’t know how capital markets work; so, they have failed to exploit opportunities in the market. Companies also fear listing on the securities yet there are many opportunities of raising capital,” he says.

State of Uganda’s Capital Market

Capital markets development in Uganda began with the passing of the Capital Markets Authority Act and the establishment of the CMA in 1996 as a semi-autonomous body responsible for promoting, developing and regulating capital markets in Uganda, with the overall objective of investor protection and market efficiency.

Since establishment, the authority has undertaken various initiatives to develop capital markets in Uganda. Notable among these was the development of legal and regulatory frameworks for issuance of securities, and investments such as collective investment schemes, public education, as well as development of frameworks for cross-border securities markets activities.

The USE was set up in 1997. The first bond was listed in 1998 and the first shares in 2000.


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