The Uganda Securities Exchange is ending open-outcry trading, where offers are written on a board on the bourse’s floor, and moving to a system of electronic equity buying and selling, Bloomberg News reported.
The Kampala-based market expects to start electronic trading in July, Chief Executive Officer Paul Bwiso said in an e-mailed response to questions on April 14.
The switch will help increase trading volumes, boost foreign participation, open the way for secondary trading of fixed-income securities and move equities dealing to three-day settlement from five, he said.
“Automation will enhance growth by increasing liquidity,” Bwiso said. It will also attract more initial public offerings and give the exchange the option of introducing new trading products, he said.
The bourse in Africa’s biggest coffee exporter is ending a system already scrapped by other exchanges on the continent, including Ghana and Kenya. Uganda is looking to attract investors into an economy where growth is set to outpace the sub-Saharan African average this year, according to the International Monetary Fund.
The USE’s all-share index of 16 stocks rose 7 per cent in 2015 through Wednesday, compared with a 5.3 per cent gain in the gauge of the most-liquid stocks in neighboring Kenya, which automated trading nine years ago.
The bourse, which started operating in 1998, also trades government debt securities and bonds issued by companies including Kakira Sugar Ltd. and Standard Chartered Plc’s local unit. Last week at the bourse, traders said they were doing trials on the automated system at newly installed computers.
Source : Punch
