)
)
This move, the central bank says is hoped to bolster Uganda's Government securities market and continue the success story of the Primary Dealer Market Maker system introduced back in October 2020.
The newly appointed PDMM banks are as follows:
- ABSA Bank
- Centenary Bank
- Citibank
- DFCU Bank
- Equity Bank
- Housing Finance Bank
- Stanbic Bank
- Standard Chartered Bank
The selection of the 8 banks followed a rigorous evaluation process initiated by BoU after soliciting Expressions of Interest (EOI) from all commercial banks.
)
)
)
The PDMM system grants exclusive access to the primary market for Government Securities to these selected banks. They play a role in enhancing liquidity and establishing fair pricing in the government securities market.
Kenneth Egesa, the Central Bank Communications Director noted that since its implementation in 2020, the PDMM system has among others increased liquidity in the Government securities market, while also boosting secondary market turnover from 40% to 160% of the total debt stock.
Additionally, Uganda's presence on the global financial stage received a significant boost with the Government securities market's listing on the FTSE Russell Frontier Markets Index.
“This development has elevated Uganda's recognition and presence in global financial markets,” he said
The PDMM system, combined with other market reforms, has substantially improved Uganda's ranking in the Absa African Financial Markets Index (AFMI). In just two years, Uganda climbed from 10th place in 2020 to an impressive 4th place in 2022, outperforming 26 African countries.
The Bank of Uganda expressed confidence in the PDMM banks, stating its belief that they will continue to be instrumental in the development of the Government securities market in Uganda.
Key points to note from this announcement:
- Investors should continue submitting their bids to their respective commercial banks as usual.
- Competitive bidding in the primary market for Government Securities will be limited exclusively to PDMM banks.
- All commercial banks will have access to the primary market for non-competitive bids (i.e., below UGX 200 million).
- Non-primary dealer banks will access government securities from the PDMM banks in the secondary market for all competitive bids (i.e., UGX 200 million and above).