Capital Markets Authority, 14 Parliament

Avenue, Jubilee Insurance Centre 8th Floor,

P.O. Box 24565, Kampala.
Tel: (+256) 414 342788/791, (+256) 312
264950/1 Fax: (+256) 414 342803.
Email: info@cmauganda.co.ug
Please visit our website at
www.cmauganda.co.ug for more information

April-June 2013, Volume 15, Number 2

INTRODUCTION 1.2 Regional Study on Risk Based Super-
vision
This Electronic Quarterly Review covers the
period April-June 2013 The East African Community (EAC) Secretariat
in the period under review through the Finan-
HIGHLIGHTS cial Sector Deepening Regionalization Project
(FSDRP-1) commissioned a regional study on
Regulatory Issues Risk Based Supervision (RBS). Codogan Financials
Limited was appointed to undertake the study
Market Development whose objectives include guiding regional secu-
rities regulators on: a suitable risk based model
Public Education for EAC market intermediaries; identifica-
tion of optimal Risk Based Capital Adequacy
Regional and International (RBCA) requirements for the region; a suitable
Cooperation automated system for implementation of the
recommended model; and the formulation of
International News a road map for the implementation of the pro-
posed risk based model.
Outlook
As part of the study, Ms. Sally Buxton from
Capital Markets in the Press Cadogan Financials Limited held a series of
meetings with key stakeholders in the Ugandan
1.0 REGULATORY ISSUES capital markets in the month of May. CMA also
extended support to the consultant in the or-
The following were the key regulatory issues
ganization of a workshop for market interme-
during the period April to June 2013;
diaries’ where preliminary findings of the study
1.1 Annual Renewal of Licences were presented on 6th June 2013. A regional
workshop to disseminate the findings will be
The Board of the Capital Markets Author- held in July 2013.
ity (CMA) reviewed license renewal applica-
tions and issued licenses for the licensing year RBS aims at recognizing activities, procedures
2013/14 following the annual inspections. A and practices of greater risk to the soundness
list of all entities licensed to provide services of the capital markets and accordingly deploy-
in the capital markets industry was published in ing supervisory resources towards the assess-
two local daily newspapers. ment of how those risks are being managed by
market intermediaries. Key benefits of RBS in-
New entrants to the list include KCB Bank clude: cost effectivenesss of the approach; ear-
Uganda Limited and Standard chartered Bank ly identification of emerging risks; and provision
Uganda Limited which were licensed as Collec- of a consistent framework for risk evaluation.
tive Investment Scheme Trustees. Also notably,
CFC Financial Services Ltd indicated a change
of name to SBG Securities Limited.
 Protecting Your Investments

2.0 MARKET DEVELOPMENT During the summit, participants reviewed

the state of the Ugandan capital markets
2.1 Africa Development Bank and identified business development, in-
(AfDB) Issues Second Tranche vestment, capital raising and strategic col-
of Medium Term Note laboration opportunities among other issues.
A total of 43 high profile speakers were in-
The Africa Development Bank (AfDB) is- volved in the summit as members of discus-
sued the second tranche of a Ush 125 Bil- sion panels or key note presenters.
lion (US $ 48.21 Million) Medium Term Note
(MTN). The tranche of Ush 12.5 Billion (US $ CMA was represented at the meeting by
4.82 Million) was over-subscribed by 55% the Chief Executive Officer, Public Educa-
with a total of Ush 19.38 Billion (US $ 7.47 tion Manager, Research and Policy Manager
Million) being received. The note was listed and the Senior Public Education Officer.
at the USE on 25th June 2012. The 10 year
note is trading at a yield rate of 85% of the 3.0 PUBLIC EDUCATION
rate on a two year government bond. The
issue is part of a program which will allow 3.1 Public Education Seminars
the AfDB to issue bonds in multiple tranches During the quarter ending 30th June 2013,
to fund infrastructure and other projects in the Public Education Unit (PEU) conducted
Uganda. The MTN approach was adopted three seminars. The first seminar was held on
to allow AfDB to regularly tap into the 10th April 2013 targeting Rotarians of the
Ugandan capital markets by issuing various Rotary Club of Naalya. The second seminar
tranches, rather than standalone transactions was at the CMA offices on 7th May 2013
thereby minimizing costs for its clients and with students from Mbarara University of
reducing the lead time necessary to access Science and Technology being hosted. The
the market. third seminar was at a training organized by
The AfDB is a multi-lateral lender estab- Stanlib Uganda for its trustees, where the
lished in 1963 to spur sustainable economic PEU made a presentation on the state of
development and social progress in its mem- capital markets in Uganda.
ber countries by mobilizing and allocating Through these outreach activities, a total of
resources for investment in member states; 131 individuals were educated on personal
and providing policy advice and technical finance, saving and investing in the capital
assistance to support development efforts. markets.
Its members include 53 African countries
and 24 non-African countries. 3.2 Exhibitions
2.2 Uganda Capital and Financial The PEU interacted with the public dis-
Markets Summit 2013 seminating information on capital markets
at three exhibitions during the period under
The inaugural Uganda Local Capital and Fi- review. The PEU participated in an exhibi-
nancial Markets Summit 2013 was held tion during the launch of the Vision 2040
from 21st to 22nd May 2013 at Kampala held at Kololo airstrip on 18th April, 2013.
Serena Hotel. The theme of the summit was Additionally, the PEU exhibited during the
‘Unlocking Uganda’s Local Capital and Fi- Investment Clubs Challenge award ceremo-
nancial Markets to Drive Development at ny at Lugogo on 27th April, 2013. In an effort
Scale’. The summit was hosted by Focus on to further reach out to the investing public,
East Africa and CMA was among the stra- the PEU exhibited at the Local Capital and
tegic partners during the event. The event Financial Markets Summit held from 21st
brought together local capital markets play- -22nd May, 2013, and at the National Social
ers, industry experts, insurance firms, pen- Security Fund week-long customer connect
sion funds, investors, SACCOs, investment platform.
groups and government decision makers.
During the exhibitions, a total of 532 inves-

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 Protecting Your Investments

tors were reached and educated on per- sector; enhance student participation in the
sonal finance as well as saving and investing capital markets; enhance establishment of
in the capital markets. investment clubs within universities in Ugan-
da; and create awareness of the need for ac-
3.3 National Financial Literacy counting and financial management skills.
Strategy
4.0 REGIONAL AND INTERNA-
The PEU participated in an implementation
planning meeting for the National Financial
TIONAL CO-OPERATION
Literacy Strategy on 20th June and 21st June, 4.1 The EAC Capital Markets In-
2013. The meeting was held at the Bank of surance and Pensions Commit-
Uganda offices. tee (CMIPC) Meeting, Kampala,
The PEU is part of the planning team for the Uganda, 8th – 10th April 2013
National Financial Literacy Strategy led by
The EAC Capital Market, Insurance and Pen-
Bank of Uganda. The National Financial Lit-
sions Committee (CMIPC) met in Kampala
eracy Strategy is expected to inform efforts
from 8th -10th of April 2013. CMA was
aimed at enabling investors improve their
represented by the Director Legal and Mar-
understanding of financial products and con-
ket Supervision and the Research and Policy
cepts through information, instruction and
Manager
objective advice. The strategy also targets
development of the skills and confidence During the meeting, issues relevant to the
of investors to be more aware of financial capital markets, insurance and pensions were
risks and opportunities in order to make in- discussed. The discussion on capital markets
formed choices. focused on the status of the EAC Securities
Directives that would form the legal and
3.4 Investment Clubs Challenge regulatory framework for cross border ac-
Award Ceremony tivities within the EAC. Work on the draft-
The 2013 Investment Clubs Challenge ing of these Directives had commenced in
award ceremony was held on 27th April 2012 but had stalled. The EAC Secretariat
2013 at a colourful event at Forest Mall, Lu- was requested to reconvene the Working
gogo. The award ceremony was preceded Group on the EAC Securities Directives to
by a car wash activity and an exhibition. Dur- complete the work it had commenced on.
ing the award ceremony, Africa Youth Fund 4.2 Meeting of the Technical
from Makerere University was awarded the
Working Group on the EAC
Model Club of the year, while the award
Securities Legal and Regulatory
for Model Personality of the year went to
Framework, 10th -14th June
Fina Naigaga (a female investor from Islamic
2013, Mwanza, Tanzania.
University in Uganda – Female Campus). All
other participating clubs were also recog- The meeting of the Technical Working
nised and rewarded. The event was presid- Group (TWG) on the development of the
ed over by the Honourable State Minister securities legal and regulatory framework
in Charge of Investments Dr. Gabriel Ajedra was convened in accordance with the rec-
and co-sponsored by Daily Monitor and Ori- ommendations of the CMIPC meeting held
ent Bank. from 8th-10th April 2013 in Kampala. CMA
is represented by the Legal Affairs Manager
The Investment Club Challenge aims at en-
on this Working Group.
hancing awareness and understanding of var-
ious pertinent capital markets and financial During the meeting, the following Direc-
sector issues, among university students. The tives were developed for submission to the
specific objectives of the Investment Club CMIPC during its next meeting:
challenge are: to positively influence atti-
tudes and perceptions towards the financial i. Directives on public offers (Equity,

3
 Protecting Your Investments

Fixed Income and Asset Backed with the FRB buying US $85 Billion worth of
Securities) bonds monthly. The announcement by Mr.
ii. Directive on Collective Investment Bernanke of the end to the FRB’s bond pur-
Schemes and Real Estate Investment chases by mid-2014 precipitated a sell-off
Trusts; of shares globally by panicky investors. The
panicky sell-offs began in New York before
iii. Directives on listing; and spreading to other major global financial cen-
iv. Directives on corporate governance ters such as Tokyo, Istanbul, Oslo and Jakarta.
for EAC market intermediaries. In London, the FTSE 100 Index declined by
2.98%, its steepest fall since September
As part of the harmonization of the EAC le- 2011. Elsewhere in Europe, shares suffered
gal and regulatory framework, the Sectoral their biggest one-day fall in 19 months, with
Council on Finance and Economic Affairs in Spain’s Ibex losing 2.9%, and the German,
2012 resolved that harmonization would French and Italian markets all down by more
proceed by way of EAC council directives. than 3%.
The EAC council directives were consid-
ered as the most feasible owing to the dif- Bond prices worldwide declined, a trend
ferent level of development in the EAC that is likely to push up borrowing costs for
capital markets. governments and consumers if sustained.
Growing fears of problems in China’s banking
4.3 High Level Task Force Meeting sector, also stoked up investors’ alarm. These
on the East African Monetary fears sent the price of many commodities
Union, 22nd -28th March 2013, such as gold, silver and crude oil downwards
Entebbe, Uganda as China is a major consumer of commodities.
CMA continued participating in the on-going Mr. Bernanke stressed that that bond pur-
negotiations on the Draft Protocol for the chases would be halted only if the economy
East African Monetary Union (EAMU). Dur- continued to improve. However, investors
ing the Sectoral Council on EAC Monetary nevertheless took his statement as a strong
Union meeting held between 21st -25th signal that the days of cheap money are com-
June, members of the High Level taskforce ing to an end. With bond yields rising and
discussing the EAMU convened. CMA was currencies falling across scores of emerging
represented by Mr. Joseph Lutwama (Man- markets, there is also a risk that vulnerable
ager-Research and Policy). The HLTF finalized countries, heavily dependent on flows of
the outstanding issues relating to the macro- “hot money” from foreign investors, will be
economic convergence criteria in the draft plunged into a crisis.
EAMU draft protocol. The draft protocol
was passed on to the Council of Ministers (Source: The Guardian, Thursday, 20th June,
for adoption at a later date when it con- 2013.)
vened.
6.0 OUTLOOK
5.0 INTERNATIONAL NEWS
CMA will be hosting the annual Kikonyogo
5.1 World Markets Plunge after Capital Markets Awards (KCMA) tentatively
Federal Reserve Bank Chair- in September 2013. The 2013 KCMA will
man Signals End to Quantitative be the eleventh edition of the Awards and
Easing (QE) CMA intends to make the edition better by
introducing more award categories to rec-
Stock markets worldwide plummeted after ognize the efforts of more journalists.
the Federal Reserve Bank (FRB) chairman, Mr.
Ben Bernanke signaled an end to America’s KCMA is an annual dinner event in Uganda’s
policy of Quantitative Easing (QE). Share financial market, where nominees compete
prices globally have surged over the past for the Awards that recognizes their contri-
year, owing to an injection of cheap money, bution towards the development of capital

4
 Protecting Your Investments

markets in the preceding year.

8.0 CAPITAL MARKETS IN THE PRESS

AfDB Bond Oversubscribed by 55%

By Martin Luther Oketch
The Daily Monitor, 26th, June 2013
The second tranche of an African Development Bank (AfDB) Bond, which was listed on
the Uganda Securities Exchange (USE) on 25th June 2013, was oversubscribed by 55%. This
was an indication of high demand for debt securities among the investing public while also
reflecting the capacity of the Ugandan capital markets to provide long term financing for
huge capital intensive projects.

In 2012, AfDB issued the first tranche of Ush 12.5 Billion of a Ush 125 Billion Medium-Term
Note (MTN). The MTN program aims at raising funds locally to finance infrastructure and
other development projects in the country. The first tranche was oversubscribed by over
50%.

According to the Executive Director of African Alliance Uganda, Mr Kenneth Kitariko, the
AfDB bond was taken up by four local pension fund managers and one foreign individual.
Mr Kitariko attributed the increased attractiveness of the AfDB bond to the banks high
credit rating of triple A. International credit rating agencies, Standard & Poor’s , Moody’s,
Fitch and Japan Credit Rating Agency reaffirmed their AAA/Aaa and AA+/Aa1 rating of
the bank’s senior and subordinated debt respectively, with a stable outlook.

QUOTES
” Emotions are your worst enemy in the stock market.”
Don Hays (American Investment Consultant).

DISCLAIMER
While every care has been taken in the preparation of this publication, note that the opinions and mate-
rial in the CMA Quarterly Review do not necessarily reflect the official views of CMA. No representation,
warranty or undertaking is given and no responsibility or liability is accepted by CMA as to the accuracy
of the information contained herein.

5
 Protecting Your Investments

LIST OF LICENCEES
This is a list of persons licensed by the Capital Markets Authority to offer various
services related to the capital markets industry in Uganda as at 30th June 2013.
LICENCEE ADDRESS
1. Uganda Securities Exchange (USE) Prism Building, Plot 71/73
Stock Exchange, Securities Central Kampala Road (opposite Bi-plous)
Depository
P.O. Box 23552, Kampala, Uganda
Tel: 0414 343 297/ 342818
Fax: 0414 340841
E-mail: info@use.or.ug
Contact: Mr. Joseph Kitamirike
Chief Executive Officer
2. African Alliance U Ltd 6th Floor Workers House, Pilkington Road
Kampala
Fund Manager, Unit Trust Manager, Tel: +256-414-235577
Investment Advisor, Broker/Dealer Fax: +256-414-235575
and member of USE E-mail: info@africanalliance.co.ug
Contact: Mr. Kenneth Kitariko

3. Pine Bridge Investment Co Ltd 1 Pilkington Road, Workers House, 7th Floor
P O Box 9831, Kampala, Uganda
Fund Manager, Investment Advisor Tel: +256-414-340707/8
Fax:+256-414-340750
E-mail: nicholas.malaki@pinebridge.com

Contact: Mr. Nicholas Malaki

4. Baroda Capital Markets Ltd Plot 18 Kampala Road
P.O. Box 7197 Kampala, Uganda
Broker/Dealer Tel: +256-414-233680/3
Investment Advisor and member Fax: +256-414-258263
of USE E-mail: bcm.ug@bankofbaroda.com
Contact: Mr. Suraj Kumar Srivastavar
5. ICEA Investment Services Ltd Rwenzori Courts, P. O. Box 33953, Kampala
Tel: +256-412-347535/+256-414-232337
Fund Management E-mail: dennis.mugalya@africaonline.co.ug
Contact: Mr. Dennis Mugalya

6. Genesis Kenya Investment Regus Kampala, Course View Towers 21 Yusuf

Management Limited Lule Road (Old Kitante Road) Nakasero, Kam-
pala
Fund Manager/ Investment Advisor P.O. Box 3502, Kampala, Uganda
Tel: 0392 312 314 324/ 342818
E-mail: genesis@swiftkenya.com
Contact: Mr. Ronald Kasolo
7. Crane Financial Services Ltd Crane Chambers, Plot 38 Kampala Road
P.O. Box 22572 Kampala, Uganda
Broker/Dealer Tel: +256-414-341414/+256-414-345345
Investment Advisor and member Fax: +256-414-341414
of USE E-mail: cfs@cranefinancialservices.com
Contact: Mr. Ajay Kumar
8. Crested Stocks and Securities 6th Floor Impala House, Plot 13/15 Kimathi
Ltd Avenue
P. O. Box 31736, Kampala, Uganda
Broker/Dealer Tel: +256-414-230900
Investment Advisor and member Fax: +256-414-230612
of USE E-mail: info@crestedsecurities.com
Contact: Mr. Robert Baldwin

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 Protecting Your Investments

LICENCEE ADDRESS
9. Dero Capital Ltd Ground Floor Course View Towers Plot 21
Yusuf Lule Road
Investment Advisor P. O. Box 5970 Kampala, Uganda
Tel: +256-712-638644, +256-702-638644,
Fax: +256-414-220727
Email: info@derocapital.com
Contact: Mr. David Ofungi
10 Dyer and Blair U Ltd Ground Floor Rwenzori House
P.O. Box 36620 Kampala, Uganda
Broker/ Dealer Tel.+256-414-233050/+256-312-265469
Investment Advisor and member E-mail: pbwiso@dyerandblair.com
of USE Contact: Mr. Paul Bwiso

11. Equity Stock Brokers Ltd Plot 6/6A Orient Plaza

P.O. Box 3972, Kampala, Uganda
Broker/Dealer Tel: +256-414-236012/3/4/5, Fax: +256-
Investment Advisor and member 414-348039
of USE E-mail: ruyonga.edward@orient-bank.com
Contact: Mr. Edward Ruyonga

12. Devere and Partners Ltd B4 Adam House, Plot 11, Portal Avenue
P. O. Box 21409 Kampala, Uganda
Investment Advisor Tel: +256-414-342411/+256-414-
340846/+256-782-807079, Fax: +256-414-
342411

Email: helpdesk@devere-group.com
Contact: Mr. Gavin Cooper
13. Deloite Uganda limited 3 Floor Rwenzori House, 1 Lumumba Avenue
P.O. Box 10314, Kampala, Uganda
Tel: +256-414-343850, +256-752-740300
Investment Advisor Email: gopiyo@deloitte.co.ug
Contact: Mr. George Opiyo

14. UAP Financial Services Ltd Floor 1 Communications House

P.O. Box 1610 Kampala, Uganda
Broker/Dealer, Fund Manager Tel: +256-312-370290
Fax: +256-414-346449
Email: financialservices@uap.co.ug, info@
uap.co.ug
Contact: Mr. Patrick Ndonye
15. PKF Consulting Ltd Plot 37 Yusuf Lule Road
Investment Advisor P. O. Box 24544, Kampala, Uganda
Tel: +256-414-341523/5
Fax: +256-414-251370, +256-414-341371
E-mail: mdalal@ug.pkfea.com
Contact: Mr. Murtuza Dalal
16. PricewaterhouseCoopers Ltd 10 Floor Communications House
1 Colville Street, Kampala, Uganda
Investment Advisor Tel: +256-414-236018, +256-414-233743
Fax: +256-414-239153
E-mail: general@ug.pwc.com
Contact: Mr. Francis Kamulegeya
17. First Renaissance Securities Ltd Unit 3, Plot 15 Kitante Close
P. O. Box 893 Kampala, Uganda
Investment Advisor Tel: +256-414-340018/9 , +256-312-
264775/6
Fax :+256-414-340016
E-mail: enquiries@renaissance.co.ug
Contact: Mr. Keith Kalyegira

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 Protecting Your Investments

LICENCEE ADDRESS
18. Stanlib 4th Floor, Crested Towers (Short), 17 Hanning-
ton Road
Fund Manager/ Investment Advi- P.O. Box 7131 Kampala, Uganda
sor Tel: +256-312-224322/600
Fax:+256-414-254697
Contact: Ms. Annette Rumanyika

19. DFCU Bank Ltd 13 Kimathi Avenue

Trustee, Collective Investment P.O. Box 70, Kampala, Uganda
Schemes Tel: +256-414-231784/+256-414-256891/3,
Impala House +256-312-300300,
Fax: +256-414-231687/+256-414-344260
E-mail: official@dfcugroup.com
Contact: Mr. Walusimbi Kaweesa
20. SBG Securities Limited (former- 4th Floor, Crested Towers (Short), 17 Hanning-
ly CFC Financial Services Ltd) ton Road
P. O. Box 7131, Kampala, Uganda
Broker/Dealer Tel: +256-414-715460/ +256-312-224600,
Investment Advisor +256-312-224985
E-mail: mburuc@stanbic.com,
Contact: Ms. Consolata Mburu
21. KCB Bank Uganda Limited 7th Floor, Commercial Plaza, Plot 7, Kampala
Road
Trustee, Collective Investment P.O.Box 7399, Kampala, Uganda
Schemes Tel: 0417-118200
Fax: 0414-345751
E-mail: kcbugandaho@kcb.co.ug
Contact: Anthony Kituuka
22. Standard Chartered Bank lim- Plot 5, Speke Road,
ited P.O Box 7111, Kampala, Uganda
Tel; +256-312-294459/ +256-414-340077
Trustee, Collective Investment Fax: +256-414-231473
Schemes and Investment Advisor Email: ug.service@sc.com
Contact: Mr. Isaac Bakuraira

23. PCP Uganda Limited Plot 4 Chwa II Road, Mbuya

P. O. Box 15373 Kampala, Uganda
Fund Manager/ Investment Advisor Tel:+256-312-264 980/3/4, Fax: +256-312-
264 985
Email: info@pearlcapital.net,
Contact: Mr. Edward Isingoma Matsiko

24. Profin Uganda Limited Plot 10 School Lane Naguru

P.O Box 36697,Kampala, Uganda
Investment Advisor Tel: +256-414-533261/2, Fax: +256-414-
533261
Email: Uganda@theprofingroup.com
Contact: Mr. Gareth Burge