Absa Bank Uganda named the best primary dealer in gov’t securities

Bank of Uganda has recognised Absa Bank as the Best Performing Bank in Uganda Government Securities for December 2020.

The award was established by the Central Bank recognising financial institutions for their successful participation in the trading of government securities, volumes traded and month-end reporting.

Speaking about the accolade, Mumba Kalifungwa, Managing Director, Absa Bank Uganda said;“This accolade is a testament to Uganda’s improvement  of market depth, which is covered under the first pillar of Absa’s Africa Financial Markets Index Report 2020. Under the pillar, the country is developing more robust and active secondary markets, which offer reliable yield curves.”

Absa Bank Uganda is one of the seven commercial banks appointed by the Bank of Uganda as Primary Dealers under the new Primary Dealer system to develop an active and liquid secondary market for the country’s government bonds.

Also part of the reforms, which came into effect on 1 October 2020 is the automation of the auction processes to enhance efficiency and price transparency, which has increased the global visibility of Uganda’s financial markets.

In tandem,  Uganda in the 2019/20 financial year, halved the withholding tax on 10-year government bonds from 20% to 10%, to boost offshore dollar inflows, ease pressure on the exchange rate, increase investor participation in future infrastructure bond auctions and reduce interest on government securities.

This is the third time that Absa is being recognised as the best Primary Dealer, after having won the same award in January and May 2020.

“Following the socio-economic shocks brought on by the COVID-19 pandemic, Uganda is going to need constant investment in the financial markets to build the economy’s resilience and drive recovery in the long-run. Absa Bank Uganda remains committed to building public/ private partnerships to enable this recovery,” Kalifungwa added.