KCB, Equity Banks to List On USE - Bourse to Automate Soon

Two of Kenya's financial giants are set to cross-list their shareholding on the Uganda Securities Exchange (USE) before the end of the year - further evidence that business is blazing the trail of East African integration.

Kenya Commercial Bank (KCB), which has presence in three of the member states of the East African Community (EAC) and Equity Bank Limited, which recently bought into Uganda Microfinance Limited (UML) plan to cross-list on the USE. Equity is the biggest bank in Kenya in terms of market capitalisation.

Also, the long awaited Central Depository System (CDS), which will automate activity at USE, would be operationalised by the end of the year with the infrastructure already installed and test runs having been completed, all in growing evidence of the great milestones the local bourse has taken as it makes a decade in business.

The CDS will provide services like immobilization of share certificates into electronic shares accounts and electronic book-entry movement of shares.

Other services by CDS include pledging of shares as collateral, statement of share accounts and also eliminate considerable settlement bottlenecks at the USE thereby paving way for electronic trading at the exchange.

USE will also see another equity, National Insurance Corporation (NIC), a former Uganda parastatal, which was bought into by Nigerian and Ugandan private investors, come to the bourse.

In further activity at the Uganda bourse, which will be celebrating 10 years of existence in November, Uganda's water utility, the National Water and Sewerage Corporation (NW&SC) and Stanbic Bank Uganda will issue corporate bonds.

Mr. Simon Rutega, the chief executive officer of USE said they were looking forward to NW&SC to issue a Ush100 billion (about US$58.8 million) bond while he did not say the value of the bond that Stanbic plans to float.

The USE, which became operational in January 1998 following the listing of an East African Development Bank (EADB) bank bond, its maiden instrument has over the past decade posted tremendous growth in terms of listings on the USE, growth in market capitalisation, shareholder growth and activity turnovers.

To date the USE boasts of nine equity listings, six corporate bonds and 30 government bonds.

Over the last 10 years, the USE has raised Ush1,800 billion ($1.058 billion). Of that, Ush103 billion ($60 million) has been raised from equities, Ush90 billion ($52.9 million) from corporate bonds and over Ush1.7 trillion ($1 billion) from government bonds.

USE market capitalisation has risen to Ush6,400 billion ($3.7 billion) from Ush2.3 billion ($1.3 million) at the listing of the first equity, Uganda Clays Limited (UCL), 10 years ago.

Rutega said the number of shareholders has also increased tremendously in recent years in terms of participation at the Initial Public Offers (IPOs) and in the secondary market activity on the USE.

As part of its 10-year celebrations, the USE will host the 12th African Stock Exchanges Association (ASEA) annual conference.

ASEA currently comprises 20 exchanges in 27 African countries.

The 12th conference under the theme: Africa on the Move - Capital Markets Driving Economic Transformation will be held on November 9 - 11, 2008 and will attract over 300 participants from capital markets within Africa and the rest of the world.

The conference has previously been hosted in Egypt, South Africa, Kenya, Ghana and Mauritius.

USE in collaboration with Rwanda Over the Counter Market, Nairobi Stock Exchange and Dar es Salaam Stock Exchange will jointly launch the first Regional Securities Training Institute, which shall be headquartered in Kampala.

The Institute shall adopt a standardized curriculum across the region. The institute will aim to improve the levels of knowledge and capacity within the capital markets.

The curriculum development is one of the activities being supported under the Efficient Securities Markets Institutional Development (ESMID), a programme jointly supported by SIDA, IFC and the World Bank to develop well functioning securities markets in Africa.

The curriculum developer is DevPar Consultants who have developed training curriculums for various other markets like Ghana, Vietnam and Thailand.

USE is also poised to launch improved Internet services to go beyond basic Internet presence.

Rutega said the exchange has re-developed and improved its online services as part of a deliberate strategy to consolidate its role of efficiently distributing trading information to all stakeholders.

He said a new look web portal with a wide range of online services (detailed information on listed companies including stock performance graphs, online registration for updates on the stock market, market data search tools, publications download tools, advertising space, discussion and feedback tools) would be availed to the stakeholders.

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