Stanchart is best dealer in trading govt securities
Securities are traded through Bank of Uganda, which mobilises funding through debt to finance government expenditure. Photo / File
What you need to know:
- Standard Chartered was ahead of Stanbic Bank, which was declared best primary dealer in the same period in 2022
Bank of Uganda has indicated that Standard Chartered was the leading dealer in government debt for the year ended September 2023.
Standard Chartered was ahead of Stanbic Bank, which was declared leader in the same period in 2022.
In banking, primary dealing involves purchase and sell of government bonds and treasury bills through Bank of Uganda to generate funds to support government expenditure.
After significant reforms in 2020, the practice - which dates back to 2005 - was restricted to eight banks to ensure subscriptions to primary auctions for increased trading and efficient pricing.
The eight banks are subject to a three-year period of performance-based restructuring, but what sets them apart is how well they supply the market with liquidity by consistently quoting competitive prices, which guarantees a steady stream of trading activity.
Standard Chartered, Absa, Citi, dfcu, Equity, Housing Finance and Stanbic have been running the 2023/26 trading span and their effectiveness has helped Uganda to be ranked fourth on the Absa Africa Financial Markets Index.
To assess their performance, Bank of Uganda analyses their trading and how it boosts global visibility ahead of index listings, reporting trades on Bloomberg, and posting two-way pricing on the Ebond platform.
Because of this, Uganda joined the FTSE-Russell Frontier Markets Bond Index in July 2023 and is seeking to be included in other indexes such as the AFMI Bloomberg Bond Index and
And in an attempt to further encourage trading and liquidity, the performance criteria for this cycle weighted secondary market activity at 70 percent.
“These milestones reflect reforms enhancing market transparency, infrastructure, and product development over the past decade. The secondary market turnover ratio increased from 54 percent before reforms to 157 percent this past year,” said Bank of Uganda deputy governor Michael Atingi-Ego.
However, he said, there are still areas to improve, including disclosure standards, leveraging the regulatory framework, and technological capabilities to elevate operational efficiency and market access.
Financing needs
According to the Primary Dealership Association, collectively, the banks have supported government to meet financing needs and maintaining sustainable public debt levels.
